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VOL. 9, ISSUE 2 (2023)
A review of the significance of joint liability lending: Its advantages and disadvantages
Authors
Arindam Jana
Abstract
Joint liability contracts
in the credit market have received a lot of attention in recent years. In this
mechanism, borrowers have to help repay the debt of any one of them who does
not pay fully. Individual lending mechanism suffers from several drawbacks like
adverse selection, moral hazard, costly verification, difficulty in enforcement
etc. Economists have proposed several theories of joint liability lending to
analyze the role of this mechanism in overcoming these difficulties.
Institutions that rely on joint liability to facilitate lending to the poor
have a long history throughout the world. This paper intends to investigate the
advantages and disadvantages of joint lending, the phases of the scheme and the
role of joint liability lending in improving the repayment performance of the
borrowers.
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Pages:16-21
How to cite this article:
Arindam Jana "A review of the significance of joint liability lending: Its advantages and disadvantages". National Journal of Advanced Research, Vol 9, Issue 2, 2023, Pages 16-21
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