Microfinance management's role and responsibility in the reduction of loan default associated with group lending with joint liability.

摘要

The concept of providing access to financial services to groups of uncollateralized poor entrepreneurs has become a mainstream poverty alleviation tool of the time (Gunjan, Soumyadeep, & Srijit, 2010; Li, Liu, & Deininger, 2009; Pal, 2012). This concept agrees with the notion that small-scale entrepreneurship is one of the most effective and sustainable tools of poverty alleviation and economic development (Gunjan, et al., 2010). While access to capital is the backbone of entrepreneurship (N. K. Shetty & Verrashekharappa, 2009), the conventional banking system labels the poor "unbankable" for lack of collateral (Brau & Woller, 2004). This, coupled with the 1974 famine in Bangladesh, compelled Professor Muhammad Yunus to design a mechanism by which the uncollateralized poor can access financial services (Yunus, 1999). This mechanism is group lending with joint liability---also referred to as social collateral (Bayulgen, 2008). The height of this mechanism's success was the formation of the Grameen Bank and the emergence of the microfinance revolution; however, the mechanism recently encountered some setbacks. This research study, therefore, will employ qualitative approach through one-on-one semi-structured telephone interviews to explore the role and contribution of management in the improvement of the microfinance process.;Keywords: microfinance, group lending, joint liability, financial inclusion, poverty eradication.