Group Lending Model under Sequential Moves
نویسندگان
چکیده
منابع مشابه
Group Lending Model under Sequential Moves
We build a simple dynamic model to investigate the sequential group lending's ability to resolve the ex-ante moral hazard and under-monitoring problems among group members in comparison with simultaneous group lending. We found that the interest rates proposed by the lender are critical to the analytical results. If the interest rate is under certain parameter conditions, both the leader member...
متن کاملJoint Liability and Peer Monitoring under Group Lending
This paper studies an incentive rationale for the use of group lending as a method of financing liquidity-constrained entrepreneurs. The joint liability feature associated with group lending lowers the liquidity risk of default but creates a free-riding problem. In the static setting, the free-riding problem dominates the liquidity risk effect under a plausible condition, thus making group lend...
متن کاملMaria Lehner: Group versus Individual Lending in Microfinance Group Lending versus Individual Lending in Micro…nance
Micro nance is typically associated with joint liability of group members. However, a large part of micro nance institutions rather o¤ers individual instead of group loans. We analyze the incentive mechanisms in both individual and group contracts. Moreover, we show that micro nance institutions o¤er group loans when the loan size is rather large, re nancing costs are high, and competition betw...
متن کاملDynamic Lending in the Ghatak/Stiglitz/Weiss adverse selection model, with Comparison to Group Lending
We derive an optimal dynamic lending contract in a simple adverse selection model with limited commitment on the borrower side. An optimal contract involves “penalty” rates after a default, and favorable rates after a success. It also charges higher rates for first-time borrowers than for repeat borrowers, as in “relationship” lending. We compare the efficiency of a group lending contract (of t...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: International Journal of Economics and Finance
سال: 2012
ISSN: 1916-9728,1916-971X
DOI: 10.5539/ijef.v4n5p146