Abstract
This study empirically tests the predictions of four primary theories applicable to joint-liability microcredit programs’ repayment performance using an administrative data in a metropolitan setting. We introduce a new variable -group names- as a proxy for social capital to capture cooperation, solidarity and drive for success, which shows a significant positive impact of 9.9% on repayment performance. Precise calculations of residential distance between group members show a deterioration of repayment performance by 1.1% with a 15-minutes increase of minimum walking distance. The results also show that joint liability, sectoral diversification, type of sector that the borrowers facilitate, the ratio of new members in a group, characteristics of loan officers, loan amount, interest rate, income-loan amount coverage ratio, the existence
of senior members, average education and diversity in income streams significantly affect repayment performance.
of senior members, average education and diversity in income streams significantly affect repayment performance.
| Original language | English |
|---|---|
| Pages (from-to) | 287-311 |
| Number of pages | 25 |
| Journal | Bulletin of Economic Research |
| Volume | 75 |
| Issue number | 2 |
| Early online date | 4 Jun 2022 |
| DOIs | |
| Publication status | Published - 1 Apr 2023 |
Data Availability Statement
Additional supporting information can be found online in the Supporting Information section at the end of this article.Keywords
- Microcredit
- Joint-liability
- Group lending
- Group names
- Borrower proximity
- Sector diversity
- Metropolitan
- Social capital
