Determinants of Repayment Performance in Indian Micro-Credit Groups
Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups' repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages...
Main Authors: | , |
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Format: | Policy Research Working Paper |
Language: | English |
Published: |
2012
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Subjects: | |
Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330104823 http://hdl.handle.net/10986/4080 |
Summary: | Despite their potential importance and
ease of modification, impacts of monitoring and loan
recovery arrangements on micro-credit groups' repayment
performance have rarely been studied. Data on 3,350 expired
group loans in 300 Indian villages highlight that regular
monitoring and audits, high repayment frequency, consumption
smoothing support through rice credit, and having group
savings deposited with the lender all significantly increase
repayment rates. Estimated magnitudes of their effects
vastly exceed those of members' socio-economic
characteristics. Significantly lower repayment on loans
originating in externally provided grant resources suggests
that stringent monitoring will be essential for these to
have a sustainable impact. |
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