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Group lending in theory and practice

In: Handbook of Microfinance, Financial Inclusion and Development

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  • Christian Ahlin
  • Godwin Debrah

Abstract

Group lending is an innovation associated with the microcredit movement that many have pointed to as responsible for microcredit’s success in reaching millions of poor borrowers. We outline a number of theories about how group lending can make lending more feasible when collateral cannot be relied upon. We also discuss evidence comparing the performance of group lending to more traditional individual loans. We end with a look at how the usage of group lending has evolved over the past few years, and discuss implications of this evolution for our historical and current understanding of group lending.

Suggested Citation

  • Christian Ahlin & Godwin Debrah, 2023. "Group lending in theory and practice," Chapters, in: Valentina Hartarska & Robert J. Cull (ed.), Handbook of Microfinance, Financial Inclusion and Development, chapter 8, pages 135-149, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:19107_8
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    Keywords

    Development Studies; Economics and Finance;

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