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The role of borrower-consigner relations on loan default - Evidence from an Italian MFI

Publication Papers

In the last few years, microfinance has gradually departed from the traditional model of group lending in favor of several forms of individual credit, which rely on mechanisms other than joint liability in order to enforce repayment. However, the relatively poor environment in which microfinance institutions (MFIs) operate still calls for substitutes of physical collateral in order to warrant borrowers’ good behavior. Therefore, evaluating the impact that non-physical guarantees exert on repayment performance remains a primary objective for lenders, in especially in the microfinance sector.

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