Microfinance Beyond Group Lending

Posted: 7 Jul 2002

See all articles by Beatriz Armendariz

Beatriz Armendariz

University College London - Department of Economics; Harvard University; Harvard University - Department of Economics

Jonathan Morduch

New York University (NYU) - Robert F. Wagner Graduate School of Public Service; New York University (NYU) - Department of Economics

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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.

Suggested Citation

Armendariz, Beatriz and Morduch, Jonathan, Microfinance Beyond Group Lending. Economics of Transition, Vol. 8, No. 2, July 2000. Available at SSRN: https://ssrn.com/abstract=241691

Beatriz Armendariz (Contact Author)

University College London - Department of Economics ( email )

Gower Street
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United Kingdom

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Harvard University - Department of Economics

Littauer Center
Cambridge, MA 02138
United States

Jonathan Morduch

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
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New York, NY 10012
United States
(212) 998-7515 (Phone)

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

HOME PAGE: http://www.nyu.edu/projects/morduch

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