Work

The economics of lending with joint liability: theory and practice

Year: 1999

Type: article

Abstract: Institutions that rely on joint liability to facilitate lending to the poor have a long history and are now a common feature of many developing countries. Economists have proposed several theories of joint-liability lending that stress various aspects of its informational and enforcement advantages over other forms of lending. This paper analyzes how joint-liability lending promotes screening, monitoring, state verification and enforcement of repayment. An empirical section draws on case studies to highlight how joint liability works in practice.

Source: Journal of Development Economics

DOI: 10.1016/s0304-3878(99)00041-3

Authors: Maitreesh Ghatak, Timothy W. Guinnane

Institutions: University of Chicago, Yale University

Language: English

Topic: Microfinance and Financial Inclusion

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,590