This paper shows that, in a group‐lending scheme with joint liability, a microfinance institution can achieve a Pareto improvement by promoting negative assortative matching among borrowers. The main results are: (i) borrowers may be better off in heterogeneous groups; and (ii) a heterogeneous group equilibrium is possible when individual or homogeneous group equilibria do not exist.
|Titolo:||Is it better to be mixed in group lending?|
|Data di pubblicazione:||2019|
|Appare nelle tipologie:||1.1 Articolo in rivista|