Doctor of Philosophy (PhD)



Document Type



Group lending has received a great attention from economists and policymakers for its successful delivery of credit to poor borrowers and its role in alleviating poverty in the developing countries. The success of group lending in providing credit to poor borrowers has been attributed to its ability to mitigate the asymmetry of information and enforcement problems in credit markets. The ability of group lending institutions to overcome the asymmetry of information and enforcement problems has been theorized to be the driving force behind their outreach to the poor, their sustainability, and their repayment performance. While there is a host of theoretical models explaining the success of group lending, empirical research has lagged behind. The focus of this thesis is to explore the determinants of repayment rates in group lending institutions taking the case of one Jordanian institution. We use data from a self designed survey of 160 borrowing groups of the Microfund for Women in Jordan to test the effect of screening, peer monitoring, group pressure, and social ties on borrowing groups’ repayment behavior. Two measures of repayment from the data base of the Microfund for Women are used. We find that these theoretical variables of interest are indeed important in explaining repayment behavior. This thesis investigates the impact of differences in the behavior of different group members on the repayment performance of the group. The survey data allows us to analyze whether the impact of joint liability, screening and monitoring activities and social ties of the group leader on repayment performance differ from those of the rest of the group members. We find that the group leader has a more significant impact in improving the repayment behavior of the group than the rest of the group members.



Document Availability at the Time of Submission

Release the entire work immediately for access worldwide.

Committee Chair

Sudipta Sarangi



Included in

Economics Commons