IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The Role of Groups and Credit Cooperatives in Rural Lending

  • Huppi, Monika
  • Feder, Gershon

Processing and collection costs of loans made to small farmers are high relative to the amount lent. Lending groups and credit cooperatives have been ascribed the potential to reach small farmers with affordable credit because the processing of one large loan rather than numerous small loans may allow for savings in administrative costs. These arrangements entail joint liability and reduce the risk of loan default. Some of the factors crucial for successful group lending are: (a) homogeneous borrowing groups that are jointly liable and assume some managerial and supervisory responsibilities; (b) establishing a common bond other than credit to enhance loan repayment as well as introduce savings mobilization; and (c) denying access to future credit to all group members in the case of default by any member. Important factors for succesful outcomes of credit cooperatives include: (a) bottom-up institutional development and training at the grass roots as well as at management levels; (b) savings mobilization by credit cooperatives rendering them financially less dependent on outside sources and enhancing borrowers incentives to repay; and (c) credit cooperatives not rushing to expand their activities beyond financial intermediation.

(This abstract was borrowed from another version of this item.)

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by World Bank Group in its journal World Bank Research Observer.

Volume (Year): 5 (1990)
Issue (Month): 2 (July)
Pages: 187-204

as
in new window

Handle: RePEc:oup:wbrobs:v:5:y:1990:i:2:p:187-204
Contact details of provider: Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Phone: (202) 477-1234
Fax: 01865 267 985
Web page: http://wbro.oxfordjournals.org/
Email:


More information through EDIRC

Order Information: Web: http://www.oup.co.uk/journals

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Adams, Dale W, 1988. "The Conundrum of Successful Credit Projects in Floundering Rural," Economic Development and Cultural Change, University of Chicago Press, vol. 36(2), pages 355-67, January.
  2. Dale W. Adams & Alfredo Antonio Pablo Romero, 1981. "Group Lending to the Rural Poor in the Dominican Republic: A Stunted Innovation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 29(2), pages 217-224, 07.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:oup:wbrobs:v:5:y:1990:i:2:p:187-204. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.