What makes a credit group tick? In-group favouritism among microfinance clients

Ivar Kolstad; Arne Wiig

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Portuguese version: O que faz um grupo de crédito funcionar? Favoritismo dentro do grupo entre clientes de microcrédito

Microcredit clients are often assigned to credit groups with joint liability for loans. But what makes a credit group work well? What credit groups are likely to generate the internal social dynamics needed for group solidarity to form and repayment to happen? This is a matter of both group dynamics and individual characteristics, as some individuals conform more easily to in-group norms.

This brief presents an experiment conducted among microcredit clients in Angola. The results suggest that more educated clients and female clients are more likely to favour members of their credit group over outside demands.

What makes a credit group tick? In-group favouritism among microfinance clients

Ivar Kolstad

Arne Wiig

CEIC-CMI Angola Programme (phase 2)

Taxation, Institutions and Participation (TIP): The dynamics of capital flows from Africa

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Subverting the Constitution and Curtailing Civil Society. Angola’s New Law on NGOs.

Africa’s Social Policy Trajectories Since the Colonial Period: Constructing social policies in Portuguese-speaking African countries, the nefarious effects of instability

Media From the Atlantic to the Indian Ocean, Communication Systems in Portuguese-Speaking Africa

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