Microfinance beyond group lending

B. A. De Aghion, Jonathan Morduch

Research output: Contribution to journalArticle

Abstract

Microlending is growing in Eastern Europe, Russia and China as a flexible means of widening access to financial services, both to help alleviate poverty and to encourage private-sector activity. We describe mechanisms that allow these programmes to successfully penetrate new segments of credit markets. These features include direct monitoring, regular repayment schedules, and the use of non-refinancing threats. These mechanisms allow the programmes to generate high repayment rates from low-income borrowers without requiring collateral and without using group lending contracts that feature joint liability.

Original languageEnglish (US)
Pages (from-to)401-420
Number of pages20
JournalEconomics of Transition
Volume8
Issue number2
StatePublished - 2000

Fingerprint

Microfinance
Group lending
China
Joint liability
Private sector
Poverty
Monitoring
Credit markets
Russia
Microlending
Schedule
Low income
Eastern Europe
Financial services
Threat

Keywords

  • Joint liability
  • Microfinance
  • Poverty relief
  • Repayment incentives
  • Transition

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Microfinance beyond group lending. / De Aghion, B. A.; Morduch, Jonathan.

In: Economics of Transition, Vol. 8, No. 2, 2000, p. 401-420.

Research output: Contribution to journalArticle

De Aghion, BA & Morduch, J 2000, 'Microfinance beyond group lending', Economics of Transition, vol. 8, no. 2, pp. 401-420.
De Aghion, B. A. ; Morduch, Jonathan. / Microfinance beyond group lending. In: Economics of Transition. 2000 ; Vol. 8, No. 2. pp. 401-420.
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