Incidence of Loan Default in Group-lending Programme

Mani Arul.Nandhi

2012

This report explores the reasons and costs of hidden loan delinquency, despite high group repayment rates prevalent in the group lending mechanism. In a Joint Liability Group, if one of the members fails to repay a loan fully, the responsibility falls on the other members of a group to repay the remaining amount; the risk is, thus, fully shared by the borrowers. The group lending model of a microfinance institution, located in a peri-urban region of Uttar Pradesh in North India, was studied.

Type

Case Study

Thematic Area

Financial Inclusion