Repayments in Group Lending Microfinance

Group lending microfinance program has gained its fame from the success of many microfinance institutions across the world. Prior to the microfinance revolution in 1970s, formal lending institutions vehemently considered that poorer people cannot be banked and cannot repay a loan lacking collateral to guarantee. One potential solution to these problems was pioneered during the late 1970s as group lending microfinance, thanks to Nobel laureate Professor M Yunus at Grameen Bank, Bangladesh. Group lending induces borrowers to self select their peer, monitor each others and enforce repayment at the end. Group lending is thus considered as the key factor behind the high rates of repayment and the success story of many microfinance institutions. In this book the mechanism of group lending is examined with theoretical rigour and justified with empirical evidences. The book is specially suitable for the professionals in microfinance, NGO personnel, policy makers, donor agencies and graduate and research students of economics and finance