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Corresponding Author:
Marta Santagata, Department of Economics, University of Genova, Italy

Actual and Historical Experiences of Successful Joint-Liability Lending

December 4, 2023
JEL classification: G20; O12
Keywords: Microfinance Institution; Joint Liability; Credit Cooperatives Banks

Abstract

The considerable growth of Microfinance Institutions (MFIs) in developing countries has fostered an extensive literature on the factors that explain the economic rationality of these institutions. Within this literature, several theories of joint-liability lending have been proposed that emphasise the informational and enforcement advantages of this form of credit over traditional credit. These advantages, which underlie the growth of MFIs such as the Grameen Bank, may explain the origin and spread of institutions such as Cooperative Credit Banks (CCBs) in Europe and Italy in the 19th century. Such institutions even at present contribute to solving situations of market failure.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
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