Jan 6, 2012

Microfinance and entrepreneurship: Group lending or individual lending?

Although microfinance institutions across the world are moving from group lending towards individual lending, this strategic shift is not substantiated by sufficient empirical evidence on the impact of both types of lending on borrowers. We present such evidence from a randomised field experiment in rural Mongolia. We find a positive impact of access to group loans on food consumption and entrepreneurship. Among households that were offered group loans the likelihood of owning an enterprise increases by ten per cent more than in control villages. 
That is from the abstract of the new paper "Group Lending or Individual Lending? Evidence from a Randomised Field Experiment in Mongolia" by Attanasio et al.

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