Microfinance and the very poor

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...the overriding importance of rules and management practices emerging from our data suggests that...even groups comprised of very poor borrowers in high risk conditions can achieve high repayment rates if proper rules and management practices are adopted.

That is the conclusion of a recent paper on the Determinants of Repayment Performance in Indian Micro-Credit Groups. I think the most fasinating finding in the paper is that the optimal number of members of micro-credit groups is exactly 14. If a group is larger or smaller than this number, the probability of repayment is lower. Is this number specific to conditions in India, or could it be similar to the Dunbar number in the sense that it reflects some inherent and universal feature of human social networks? 


Ryan Hahn

Operations Officer

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