IDEAS home Printed from
   My bibliography  Save this paper

Progressive Lending as a Dynamic Incentive Mechanism in Microfinance Group Lending Programmes: Empirical Evidence from India


  • K Naveen Kumar

    (Institute for Social and Economic change)

  • Veerashekarappa

    (Institute for Social and Economic change)


Microfinance through joint liability or group lending has received a lot of attention recently from policy makers as well as academicians. It is playing important role in delivering financial services to the ‘socially and economically excluded’ poor, in general, and women, in particular. Group- lending works with various dynamic incentives. One such is the principle of progressive lending which plays vital role in sustaining the groups in the delivery of microfinance services to its members. In progressive lending, a typical borrower receives very small loan amounts initially, which increase with a good repayment record or is linked to new larger loans. This paper explores the possible theoretical and empirical relationship between progressive lending and its determinants in the joint liability lending approach. The primary survey was conducted in 10 villages covering 106 SHGs and 318 members in Karnataka, India. The results indicate that age, size, savings and repayment record of the group significantly influence progressive lending.

Suggested Citation

  • K Naveen Kumar & Veerashekarappa, 2011. "Progressive Lending as a Dynamic Incentive Mechanism in Microfinance Group Lending Programmes: Empirical Evidence from India," Working Papers 270, Institute for Social and Economic Change, Bangalore.
  • Handle: RePEc:sch:wpaper:270

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Microfinance; Groupl Lending;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sch:wpaper:270. 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: (B B Chand). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.