Improving Design and Performance of Group Lending: Suggestions from Burkina Faso
36 Pages Posted: 22 Feb 2008
We summarize lessons learned by a credit program for women in Burkina Faso. Three observations are made regarding program design: 1) high membership turnover means mutual guarantee groups should be smaller and more central to non-repayment penalties; 2) high turnover in economic activities implies more training in best practices and more variety and experimentation in credit and savings mechanisms; and 3) high degrees of stocking activity suggests the need to develop instruments to mitigate commodity price risk at the individual and program level. Three observations are made regarding program implementation: 1) be more consistent in the treatment of debts of deceased borrowers; 2) become more sensitive to the complexity and variety of procedures followed in the event of non-repayment; and 3) devote more attention to preventing and mitigating the effects of staff embezzlement.
Keywords: microfinance, group-based lending, gender credit, Africa, Burkina Faso
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