Get premium membership and access questions with answers, video lessons as well as revision papers.

State the disadvantages of Group Lending.

      

State the disadvantages of Group Lending.

  

Answers


Kavungya
- Peer monitoring - if the population of potential borrowers is dispersed and local
information is weak and costly to obtain, group monitoring activities are hard to
implement.
- If group lending takes place in urban areas, where labor mobility is high and
individuals may not have much information about their potential partners, group
lending becomes difficult.
- If borrowers cannot observe each other’s effort levels (or are otherwise reluctant
to punish shirkers) then group lending can undermine incentives by encouraging
“free riding.”
Kavungya answered the question on March 26, 2019 at 08:53


Next: Define specific heat capacity.
Previous: To determine the specific heat capacity of a solid by the method of mixtures, a solid of known mass was heated in blust furnace to...

View More Economics of Microfinance II Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions