Abstract
Microlending is growing in Eastern Europe, Russia and China as a flexible means of widening access to financial services, both to help alleviate poverty and to encourage private-sector activity. We describe mechanisms that allow these programmes to successfully penetrate new segments of credit markets. These features include direct monitoring, regular repayment schedules, and the use of non-refinancing threats. These mechanisms allow the programmes to generate high repayment rates from low-income borrowers without requiring collateral and without using group lending contracts that feature joint liability.
Original language | English (US) |
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Pages (from-to) | 401-420 |
Number of pages | 20 |
Journal | Economics of Transition |
Volume | 8 |
Issue number | 2 |
DOIs | |
State | Published - 2000 |
Keywords
- Joint liability
- Microfinance
- Poverty relief
- Repayment incentives
- Transition
ASJC Scopus subject areas
- Economics and Econometrics