[Blueboard] Dept. of Economics Seminar: Group Lending, Social Diversity & Welfare

ncabiles at ateneo.edu ncabiles at ateneo.edu
Tue Mar 4 14:37:15 PHT 2008

Group Lending, Social Diversity & Welfare

The success of Grameen banking led to the popular belief that group  
lending is a viable microfinance option for many to get out of  
poverty.  But the belief becomes an illusion when it is adopted in  
communities characterised by heterogeneities or diversity.  With  
heterogeneities in group membership, group lending may not be able to  
address the market failures that it is fundamentally designed to  
resolve, e.g. adverse selection, moral hazard and enforcement, due to  
adjustment/intolerance costs.  Working on the data in the Philippines,  
we found that, on average, diversity is negatively associated with  
trust, repayment rates, monitoring and verification, and is likely to  
restrain welfare impact.

Speaker: Assad Abdullah Baunto, MPhil
Date: March 7, 2008, Friday
Time: 4:30-6:00PM
Venue: Economics Dept. Conference Room, Department of Economics
        Rm 409 Ricardo & Dr. Rosita Leong Hall

For further information, please contact the Department of Economics at
loc. 5221-5222.

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