Determinants of Repayment Performance in Indian Micro-Credit Groups

Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups' repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages...

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Main Authors:	Deininger, Klaus, Liu, Yanyan
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCESS TO INFORMATION AMOUNT OF LOANS ANNUAL INTEREST RATE AUDITS BANK LOANS BORROWER CASE OF DEFAULT CASH COLLATERAL COLLATERAL COMMERCIAL BANK COMMERCIAL BANK LOANS COMMERCIAL BANKS CONSUMPTION SMOOTHING CREDIBILITY CREDIT AGREEMENT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT GROUPS CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKET CREDIT MARKETS CREDIT WORTHINESS DEFAULTS DEPENDENT DEPOSIT DEVELOPING COUNTRIES ECONOMIC CHARACTERISTICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH FINANCIAL AFFAIRS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SERVICES FIRST LOAN FULL REPAYMENT GENDER GROUP LENDING GROUP LENDING PROGRAMS GROUP LOANS GROUP SAVINGS HOUSEHOLDS INDIVIDUAL LOAN INSTALLMENT INSTALLMENTS INSURANCE INTEREST RATE INTERNAL SAVINGS INTERNATIONAL BANK INVESTMENT FUND JOINT LIABILITY LENDER LOAN LOAN CHARACTERISTICS LOAN RECOVERY LOAN REPAYMENT LOAN SIZE LOANS FROM BANKS MARKETING MFIS MICRO-CREDIT MICRO-FINANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MORAL HAZARD OUTREACH POOR BORROWERS PROBABILITIES PROBABILITY PUBLIC GOODS REPAYMENT REPAYMENT INCENTIVES REPAYMENT PERFORMANCE REPAYMENT RATES RISK POOLING RURAL FINANCIAL MARKETS SAVINGS SOCIAL COLLATERAL THRIFT TRUST FUND URBAN DEVELOPMENT VILLAGE VILLAGES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330104823 http://hdl.handle.net/10986/4080

id	okr-10986-4080
recordtype	oai_dc
spelling	okr-10986-40802021-04-23T14:02:15Z Determinants of Repayment Performance in Indian Micro-Credit Groups Deininger, Klaus Liu, Yanyan ACCESS TO INFORMATION AMOUNT OF LOANS ANNUAL INTEREST RATE AUDITS BANK LOANS BORROWER CASE OF DEFAULT CASH COLLATERAL COLLATERAL COMMERCIAL BANK COMMERCIAL BANK LOANS COMMERCIAL BANKS CONSUMPTION SMOOTHING CREDIBILITY CREDIT AGREEMENT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT GROUPS CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKET CREDIT MARKETS CREDIT WORTHINESS DEFAULTS DEPENDENT DEPOSIT DEVELOPING COUNTRIES ECONOMIC CHARACTERISTICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH FINANCIAL AFFAIRS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SERVICES FIRST LOAN FULL REPAYMENT GENDER GROUP LENDING GROUP LENDING PROGRAMS GROUP LOANS GROUP SAVINGS HOUSEHOLDS INDIVIDUAL LOAN INSTALLMENT INSTALLMENTS INSURANCE INTEREST RATE INTERNAL SAVINGS INTERNATIONAL BANK INVESTMENT FUND JOINT LIABILITY LENDER LOAN LOAN CHARACTERISTICS LOAN RECOVERY LOAN REPAYMENT LOAN SIZE LOANS FROM BANKS MARKETING MFIS MICRO-CREDIT MICRO-FINANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MORAL HAZARD OUTREACH POOR BORROWERS PROBABILITIES PROBABILITY PUBLIC GOODS REPAYMENT REPAYMENT INCENTIVES REPAYMENT PERFORMANCE REPAYMENT RATES RISK POOLING RURAL FINANCIAL MARKETS SAVINGS SOCIAL COLLATERAL THRIFT TRUST FUND URBAN DEVELOPMENT VILLAGE VILLAGES Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups' repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages highlight that regular monitoring and audits, high repayment frequency, consumption smoothing support through rice credit, and having group savings deposited with the lender all significantly increase repayment rates. Estimated magnitudes of their effects vastly exceed those of members' socio-economic characteristics. Significantly lower repayment on loans originating in externally provided grant resources suggests that stringent monitoring will be essential for these to have a sustainable impact. 2012-03-19T19:09:38Z 2012-03-19T19:09:38Z 2009-03-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330104823 http://hdl.handle.net/10986/4080 English Policy Research working paper ; no. WPS 4885 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper South Asia South Asia South Asia Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCESS TO INFORMATION AMOUNT OF LOANS ANNUAL INTEREST RATE AUDITS BANK LOANS BORROWER CASE OF DEFAULT CASH COLLATERAL COLLATERAL COMMERCIAL BANK COMMERCIAL BANK LOANS COMMERCIAL BANKS CONSUMPTION SMOOTHING CREDIBILITY CREDIT AGREEMENT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT GROUPS CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKET CREDIT MARKETS CREDIT WORTHINESS DEFAULTS DEPENDENT DEPOSIT DEVELOPING COUNTRIES ECONOMIC CHARACTERISTICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH FINANCIAL AFFAIRS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SERVICES FIRST LOAN FULL REPAYMENT GENDER GROUP LENDING GROUP LENDING PROGRAMS GROUP LOANS GROUP SAVINGS HOUSEHOLDS INDIVIDUAL LOAN INSTALLMENT INSTALLMENTS INSURANCE INTEREST RATE INTERNAL SAVINGS INTERNATIONAL BANK INVESTMENT FUND JOINT LIABILITY LENDER LOAN LOAN CHARACTERISTICS LOAN RECOVERY LOAN REPAYMENT LOAN SIZE LOANS FROM BANKS MARKETING MFIS MICRO-CREDIT MICRO-FINANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MORAL HAZARD OUTREACH POOR BORROWERS PROBABILITIES PROBABILITY PUBLIC GOODS REPAYMENT REPAYMENT INCENTIVES REPAYMENT PERFORMANCE REPAYMENT RATES RISK POOLING RURAL FINANCIAL MARKETS SAVINGS SOCIAL COLLATERAL THRIFT TRUST FUND URBAN DEVELOPMENT VILLAGE VILLAGES
spellingShingle	ACCESS TO INFORMATION AMOUNT OF LOANS ANNUAL INTEREST RATE AUDITS BANK LOANS BORROWER CASE OF DEFAULT CASH COLLATERAL COLLATERAL COMMERCIAL BANK COMMERCIAL BANK LOANS COMMERCIAL BANKS CONSUMPTION SMOOTHING CREDIBILITY CREDIT AGREEMENT CREDIT CONSTRAINTS CREDIT COOPERATIVE CREDIT GROUPS CREDIT INFORMATION CREDIT INFORMATION SYSTEMS CREDIT MARKET CREDIT MARKETS CREDIT WORTHINESS DEFAULTS DEPENDENT DEPOSIT DEVELOPING COUNTRIES ECONOMIC CHARACTERISTICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH FINANCIAL AFFAIRS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SERVICES FIRST LOAN FULL REPAYMENT GENDER GROUP LENDING GROUP LENDING PROGRAMS GROUP LOANS GROUP SAVINGS HOUSEHOLDS INDIVIDUAL LOAN INSTALLMENT INSTALLMENTS INSURANCE INTEREST RATE INTERNAL SAVINGS INTERNATIONAL BANK INVESTMENT FUND JOINT LIABILITY LENDER LOAN LOAN CHARACTERISTICS LOAN RECOVERY LOAN REPAYMENT LOAN SIZE LOANS FROM BANKS MARKETING MFIS MICRO-CREDIT MICRO-FINANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MORAL HAZARD OUTREACH POOR BORROWERS PROBABILITIES PROBABILITY PUBLIC GOODS REPAYMENT REPAYMENT INCENTIVES REPAYMENT PERFORMANCE REPAYMENT RATES RISK POOLING RURAL FINANCIAL MARKETS SAVINGS SOCIAL COLLATERAL THRIFT TRUST FUND URBAN DEVELOPMENT VILLAGE VILLAGES Deininger, Klaus Liu, Yanyan Determinants of Repayment Performance in Indian Micro-Credit Groups
geographic_facet	South Asia South Asia South Asia Asia India
relation	Policy Research working paper ; no. WPS 4885
description	Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups' repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages highlight that regular monitoring and audits, high repayment frequency, consumption smoothing support through rice credit, and having group savings deposited with the lender all significantly increase repayment rates. Estimated magnitudes of their effects vastly exceed those of members' socio-economic characteristics. Significantly lower repayment on loans originating in externally provided grant resources suggests that stringent monitoring will be essential for these to have a sustainable impact.
format	Publications & Research :: Policy Research Working Paper
author	Deininger, Klaus Liu, Yanyan
author_facet	Deininger, Klaus Liu, Yanyan
author_sort	Deininger, Klaus
title	Determinants of Repayment Performance in Indian Micro-Credit Groups
title_short	Determinants of Repayment Performance in Indian Micro-Credit Groups
title_full	Determinants of Repayment Performance in Indian Micro-Credit Groups
title_fullStr	Determinants of Repayment Performance in Indian Micro-Credit Groups
title_full_unstemmed	Determinants of Repayment Performance in Indian Micro-Credit Groups
title_sort	determinants of repayment performance in indian micro-credit groups
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090330104823 http://hdl.handle.net/10986/4080
_version_	1764389827513417728

Determinants of Repayment Performance in Indian Micro-Credit Groups

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