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Improving Design and Performance of Group Lending: Suggestions from Burkina Faso

36 Pages Posted: 22 Feb 2008  

Michael Kevane

Santa Clara University - Leavey School of Business - Economics Department

Barbara MkNelly

Freedom from Hunger

Abstract

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

Suggested Citation

Kevane, Michael and MkNelly, Barbara, Improving Design and Performance of Group Lending: Suggestions from Burkina Faso. World Development, Vol. 30, No. 11, 2003. Available at SSRN: https://ssrn.com/abstract=1096253

Michael Kevane (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Barbara MkNelly

Freedom from Hunger ( email )

1644 Da Vinci Court
Davis, CA 95616
United States

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