Case Study

Does the Group Leader Matter? The Impact of Monitoring Activities and Social Ties of Group Leaders on the Repayment Performance of Group-based Lending in Eritrea

Monitoring and social ties in group-based lending programs
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This study, conducted in Eriteria, seeks to analyze the effects of monitoring and social ties of the group leader vis-à-vis that of the other group member on repayment performance of the group. The study claims to be the first empirical study looking at this issue. The study was based on the hypothesis:

  • Monitoring activities and social ties of the group leader have a stronger positive impact on the repayment performance of groups whereas this is not true for social ties of other group members.

It presents the following findings and outcomes:

  • Social ties of the group leader do have a positive effect on repayment performance of groups, whereas this is not true for social ties of other group members.
  • Monitoring activities of the group leader do not necessarily have a stronger positive impact on group repayment performance.
  • All variables measuring monitoring activities, either of the group leader or the othergroup member, are found to be statistically insignificant.

About this Publication

By Hermes, N., Lensink, R. , Mehrteab, H.
Published