A Systematic Review of Group Lending

A Systematic Review of Group Lending | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article A Systematic Review of Group Lending Shahriyar Mohammadi, Hosin Hasanzadeh Sarvestani, Reza Bani Asad This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6123901/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Group lending is a type of loan and deposit process management employed by financial institutions when interacting with groups of customers. This mechanism was first introduced by the Grameen Bank of Bangladesh in 1976 under the leadership of Muhammad Yunus. Subsequently, banks worldwide have adopted and modified this approach. This study employed a meta-synthesis of secondary studies in the conventional literature to identify 764 documents from various databases. After a rigorous screening process, 40 articles related to group lending were selected. Thematic analysis was used to analyze the data, identifying five main categories: group versus individual lending, liability, group formation characteristics, financial factors, and global experiences of group lending. The study concludes by emphasizing the need for more indigenous research on group lending, particularly research grounded in local implementation data. JEL Classification: G21 loan group lending systematic review thematic analysis microfinance joint liability 1. Introduction Financial institutions can generally adopt two approaches for managing loan and deposit processes: individual and group-based customer interactions. The first approach, which is the prevailing method in conventional banking, involves managing operational processes on an individual basis. Microfinance institutions have widely implemented the solidarity group model, the second method. Three operational arrangements can be identified within this model, differing in the distribution of costs associated with loan disbursement and deposit-taking. The first arrangement, the self-help group model, involves a group of 10 to 20 individuals forming a collective that enters into a group contract with a bank to access credit and savings services. It is essential to emphasize that the relationship between the group and the bank is established at the group level, with no individual members having direct relationships with the bank. This model, known as the linkage model, demands close social interactions and strong social bonds among group members. NABARD, the primary bank in India, was the first to implement the program of linking banks with self-help groups in 1992(Motevaselli & Aghababaei, 1387, pp. 26–28, citing Zeller, 2001 ). The second type of arrangement, adopted by the traditional Grameen Bank model (pre-2000) and Acción International, is characterized by groups of 4 to 10 self-selected members (5 in Grameen, 5–10 in Acción). In this model, loans are provided to individuals, yet the entire group bears joint responsibility for repayment. Social cohesion is essential to enforce repayment by applying pressure and penalties on defaulting members. This method is termed the individual/group lending model (Motevaselli & Aghababaei, 1387, pp. 26–28, citing Zeller, 2001 ). The third type of group lending arrangement, lacking joint liability, is characterized by self-selected groups. The current Grameen II model (implemented since 2000) is a prime example. In this model, the group primarily fosters community, cultivates an entrepreneurial identity, establishes networks, provides mutual support, and facilitates entrepreneurial training. This method can be viewed as a variant of individual lending (Motevaselli & Aghababaei, 1387, pp. 26–28, citing Conlin, 1999 ; Kibria et al., 2003 ). The most distinguishing feature common to these three arrangements is the absence of the need for traditional banking collateral, which differentiates them from other lending modalities. The underlying reason for the adoption of this mechanism was the numerous challenges faced by the banking system and society, including limited credit access for the poor, inadequate financing for low-income entrepreneurs, decreasing social interaction, elevated credit and default risks for banks, increased transaction costs, intricate and costly collateral and guarantee processes for loans, and information asymmetry leading to adverse selection and moral hazard among clients. These factors have been pivotal in driving some institutions to transition from conventional banking to this alternative approach. This mechanism was first introduced by the Grameen Bank of Bangladesh in 1976 under the leadership of Muhammad Yunus. Subsequently, banks worldwide have adopted and modified this approach. In Iran, the Agricultural Bank of Iran had already implemented this mechanism before the Islamic Revolution (around 1971). However, more documentation regarding its implementation needs to be published. This research seeks to categorize and review the literature on group lending, providing a comprehensive overview of existing research and highlighting the weaknesses, overlooked areas, and strengths within this domain. The objective is to address the significant knowledge gaps in the country regarding group lending and to promote and develop this model among domestic banks, particularly for microcredit and lending to underprivileged individuals. 2. Literature review A comprehensive systematic review of the domestic and international literature on group lending is yet to be undertaken. 3. Theoretical Literature Bhatt & Tang ( 1998 , 2001 ) argued that group lending can be categorized into three types: 1. Group loans with group liability, 2. Individual loans within a group with joint group liability, and 3. Individual loans within a group with individual liability. The strength of social relationships and the level of social capital are significant factors in determining the choice among these three methods (Woolcock, 1999 ). 3.1 The benefits of group-based customer targeting 3.1.1 Internal dimensions of banking The overwhelming number of individual customers visiting bank branches, coupled with limitations on hiring new staff and opening additional branches, has resulted in suboptimal customer service. Banks can adopt a group-based service model to overcome this challenge, thereby reducing individual customer visits. By designing effective processes and structures and leveraging information technology, banks can improve customer service, gradually downsize their branch network, and reduce operational costs (Monetary and Banking Research Institute, 2018). 3.1.1.1 Transaction costs Group lending has been the subject of extensive research, with transaction costs being a key area of focus. Coase's theorem (1937) suggests that the frequency and complexity of transactions shape the contracts employed, each with its unique enforcement mechanisms and associated transaction costs for the parties involved. Thus, the optimal contract minimizes transaction costs. When compared to individual lending, group lending methods offer the advantage of lower transaction costs. Moreover, group lending mitigates the complexities involved in financial transactions (Bhatt & Tang, 2001 , p. 1110). From a lender's standpoint, group lending methods entail lower operational costs due to reduced customer screening, monitoring, and evaluation requirements, with many of these tasks being delegated to the borrowers. 3.1.1.2 Mitigating Asymmetric Information Issues The problem of asymmetric information is a crucial driver of the adoption of group lending. Traditional banking systems primarily rely on two strategies to mitigate adverse selection and moral hazard: credit scoring and collateral. Credit scoring involves using experts to assess borrowers' creditworthiness, whereas collateral is used to mitigate moral hazard and encourage loan repayment. However, research findings suggest that group lending, with its distinctive features of joint liability and peer selection, effectively mitigates adverse selection and moral hazard, ensuring contract enforcement. One of the core principles of group lending is peer selection. Borrowers tend to form groups with individuals with similar risk characteristics and commitment levels. Group members monitor each other's activities, offer support, and ensure everyone contributes to the group's success. In communities with strong social bonds (such as rural communities, factory workers, hospital staff, or school teachers), the shared commitment can create significant social pressure on members who fail to meet their obligations. Peer monitoring is a crucial element in the effectiveness of this mechanism. The ability of borrowers to monitor each other's investment behavior throughout the repayment period is essential. Peer pressure is another vital component of this mechanism. When borrowers cannot threaten to exclude their peers from the group, the likelihood of moral hazard increases. Additionally, peer pressure discourages default, as borrowers understand that if one member defaults, the remaining members must repay. Social sanctions and the resulting reputational harm provide a robust enforcement mechanism to ensure commitment. Therefore, the joint liability feature promotes the formation of groups composed of homogeneous individuals (Aghababaei & Motevaselli, 2007, pp. 19–25; Delgado, 2005 ). Drawing on experiences with credit unions, researchers have suggested that joint liability can function as a tool for creating homogeneity among group members, thus contributing to the group's success (Hollis & Sweetman, 1998). 3.1.2 Social dimension A second criterion for targeting group clients is focusing on identity formation and community strengthening through group-based financial services. By providing financial services to a group, linking individual credit to group credit, and establishing internal control mechanisms within groups, cooperation and solidarity among individuals and communities can be enhanced (Monetary and Banking Research Institute, 2018). The social benefits of group meetings are well-documented: Feigenberg et al. ( 2010 ) found that weekly meetings, as compared to monthly ones, fostered increased social interactions and risk-sharing among group members. 3.1.2.1 Group membership effects A crucial benefit of group lending is the effect of group membership. Varian ( 1990 ) finds that the incentive to increase the repayment probability of other group members induces more productive individuals to transfer necessary knowledge to less productive ones, thereby improving the latter's productivity. Empirical studies have corroborated this theoretical result from Varian's model. As shown in studies by Kibria et al. ( 2003 ) on U.S. group lending programs and Gomez and Santor ( 2001 ) on the Canadian context, a key outcome of group dynamics is the creation of networks and mutual support systems. By sharing knowledge and experiences, members can effectively address many specialized challenges and problems within their respective groups. Developing a shared entrepreneurial identity and a sense of community among group members following initial meetings fosters trust and collaboration. 3.1.2.2 Maintaining group cohesion and enhancing positive intra-group relationships A significant benefit of offering services to customer groups lies in the pre-existing social networks and relationships within these groups. Furthermore, group leaders can act as intermediaries between the bank and customers, enhancing service delivery and reducing the bank's lending exposure. Strong, positive relationships among group members promote increased social interaction and participation within and between members and group leaders, leading to greater group cohesion. This increased cohesion enhances cooperation between group members, leaders, and the bank. Group members are likelier to exhibit positive credit behavior within their social circles. Furthermore, in the event of a loan default by one member, others are more likely to provide support. Ultimately, the bank can more effectively collect outstanding loans through group leaders who act as bank representatives within the group (Monetary and Banking Research Institute, 2018). 3.2.1.3 Promoting members' social participation In this model, both the bank and customers stand to gain, as certain banking operations, such as account opening and loan application, are delegated to customers, particularly group leaders. However, the specific extent of delegation may differ across various group lending models. From the beginning of their interaction with the bank, all group members, leaders, and facilitators are provided with comprehensive information about group formation and the services they will receive. As a result, voluntary social participation will be established among all group members, motivated to obtain more accessible and cheaper banking services. Cultural adaptation, education, information dissemination to groups concerning various banking matters, and recognition and rewards for group leaders, including material and non-material incentives, will promote increased social participation among group members (Monetary and Banking Research Institute,2018). 4. Research methodology This study takes an interpretive philosophical stance and employs an inductive logic. Its primary objective is applied. It adopts a systematic review approach and utilizes meta-synthesis as its research strategy. Thematic analysis was employed to analyze the data. Secondary data sources such as articles and books were used for the meta-synthesis. Secondary research data are essential for systematic reviews, as they facilitate the identification of research gaps in previous studies and enable the organization and utilization of existing knowledge. Systematic reviews have become increasingly prevalent. This study will adopt a meta-synthesis approach, a sub-strategy of systematic reviews. The research process was defined, coded, and modeled using MaxQDA software. Meta-synthesis protocol In English and Persian documents, each study and secondary data related to group lending were meticulously reviewed for this research. Systematic reviews allow the banking research community to gain insights into past research and experiences with group lending in banks worldwide. The meta-synthesis procedure followed in this study is: Constructing research questions aligned with objectives and research issues; A systematic review of group lending literature - Identifying keywords; - Identifying reliable databases and applying both manual and automated search method; Examining inclusion and exclusion criteria for studies; Identifying relevant studies; Deriving codes and concepts from documents; Quality Control; Analysis of data to address research objectives. Data analysis A meta-analysis approach was employed to systematically review past research and experiences of group lending in global banks. This process involved: Research questions What are the critical research areas regarding the mechanisms of group lending that have been investigated in reputable academic journals? What are the research gaps in the field of group lending? A systematic review of literature on group lending Eligible studies were chosen for meta-analysis at this stage, and inclusion and exclusion criteria were defined. Subsequently, the researcher focused their targeted search on published studies across diverse sources, identifying relevant keywords. This study identified published sources through credible databases and academic search engines. The search process and its steps are outlined below. Identifying relevant keywords A systematic literature review was conducted to identify relevant studies on group lending. Keywords were identified based on prior research and searched in titles according to a predefined protocol. Boolean operators were utilized to refine the search and ensure a comprehensive literature review. Identifying reliable databases and applying search method The titles, abstracts, and keywords of documents in information databases were searched for terms related to the research. The search terms included "group lending," "solidarity group," "joint liability," "group loans," "solidarity lending," "group-based credit," and "collective responsibility. "Sources and documents with titles that initially matched the keywords were given priority in the review process. English-language articles were searched in JSTOR 4 , ScienceDirect 5 , Sage 6 , Emerald 7 , Google Scholar 8 , Springer 9 , Wiley 10 , and Taylor & Francis 11 . Domestic databases such as the Islamic Republic of Iran Jihad for University's Scientific Information Database 12 , NoorMag 13 , Civilica 14 , IranDoc 15 , and the National Library was used to search for Persian sources. The combined results of searching and examining keywords in various databases yielded 764 documents. All retrieved documents were saved in the CITAVI software to analyze and evaluate the meta-synthesis approach. selection criteria for studies The goal of identifying criteria is to review research in meta-synthesis systematically. Two primary criteria for study selection are proposed: a) Inclusion criteria: The objective of inclusion criteria is to specify the standards by which studies will be included in the review. The inclusion criteria for this study are: Peer-reviewed and published articles in reputable international journals; Articles that focus on group lending; Studies that directly answer the research questions; Articles derived from doctoral dissertations and theses published in reputable journals; Persian articles published in journals approved by the Ministry of Science; b) Exclusion criteria: Certain studies must be excluded from the meta-synthesis analysis. These criteria include: Articles written in languages other than Persian or English; Articles that are outside the scope of the research topic. Identifying relevant studies The corpus of articles was imported into Citavi 6 16 , a knowledge management and bibliographic software. Relevant keywords were extracted and classified for each article. The software enabled the categorization of the collected data. Subsequently, the analyses were adjusted or compared during the research process, leading to the integration of certain concepts. The results are summarized in the table below: Table 1: Results of a search for group lending in selected databases A preliminary search identified 764 potential documents. After reviewing titles, 197 documents were selected for their relevance to the research topic. Diagram 1 Process of identifying and selecting final documents in meta-synthesis After removing duplicate records from each database, the dataset was narrowed to 144 documents for further examination. A second review excluded 26 documents deemed irrelevant to the research objectives. Consequently, 118 documents were subjected to a content analysis. After thoroughly evaluating each title, 40 documents were ultimately selected for meta-analysis and the application of group facilitation methods. Deriving codes and concepts from documents The codes derived from the articles were inputted into the MaxQDA software for analysis. The software generated base codes and code groups corresponding to themes and higher-level categories. These results were subjected to further analysis in the following stage. Table 2 Group lending studies Authors Research topic Code 1 Code 2 Code 3 1 Besley and Coate 1995 Group lending, repayment incentives, and social collateral Increased repayment via group lending The impact of group lending on repayment Financial factors 2 Bhatt and Tang 1998 Transaction costs challenges in group-based microfinance: An institutional perspective. Transaction costs The impact of group lending on costs Financial factors 3 Van Tassel 1999 Group lending under asymmetric information The positive role of joint liability in peer monitoring Joint liability Liability 4 Conlin 1999 Peer-to-peer microfinance programs in Canada and the United States Implementation of group lending programs in the United States and Canada Failures of group lending programs Global experiences in group lending 5 Sadoulet 1999 Group balance in group lending Role of joint liability in group lending Joint liability Liability 6 Ghatak and Guinnane 1999 The Economics of Group Lending with Joint Liability: Theory and Practice The Positive Role of Joint Liability Joint liability Liability 7 Ghatak 1999 Group lending, local information, and peer selection The role of group lending in reducing asymmetric information The impact of group lending on asymmetric information Financial factors 8 Jaffer 1999 Microfinance and joint liability lending mechanisms: Enhancing Access to credit through contractual innovation The positive role of joint liability Joint liability Liability 9 Laffont and N’Guessan 2000 Group lending and adverse selection The positive impact of group lending on adverse selection when group members know each other The impact of group lending on asymmetric information Financial factors 10 Carpenter and Sadoulet 2000 Group risk in credit groups: Evidence from Guatemala The insufficiency of social collateral for improving repayment The impact of group lending on repayment Financial factors 11 Bhatt and Tang, 2001 Designing group-based microfinance programs: Theoretical and policy consideration Grameen and Acción International: Successful examples of Group lending Successful experiences in group lending Global experiences in group lending 12 Rai and Sjostrom 2004 Moral hazard, collusion, and group lending The impact of collusion under adverse selection The impact of group lending on asymmetric information Financial factors 13 Rai and Sjostrom 2004 Is Grameen lending effective? Repayment incentives and insurance in rural economies Cross reporting The impact of group lending on asymmetric information Financial factors 14 Natarajan 2004 Can group lending overcome the problem of adverse selection Adverse selection The impact of group lending on asymmetric information Financial factors 15 Cassar, Crowley, and Wydick, 2005 The impact of social capital on group loan repayment: Evidence from field experiment Social capital among group members Social capital Characteristics of group formation 16 Chowdhury 2005 Group lending: Sequential financing, peer monitoring, and joint liability Sequential financing, peer monitoring, and joint liability Joint liability Liability 17 Ghatak, Gangopadhyay and Lensink 2005 Joint Liability Lending: The Impact of Peer Selection The positive role of joint liability Joint liability Liability 18 Hermes, Lensink and Mehrteab 2005 Peer monitoring, social relationships, and moral hazard in group lending programs: Evidence from Eritrea The experience of group lending in Eritrea Successful experiences in group lending Global experiences in group lending 19 Hermes, Lensink and Mehrteab 2006 Does the Group Leader Matter? The Impact of Leader’s Monitoring, Activities, and Social Relationships on Group Loan Repayment Performance in Eritrea The absence of a positive role for the group leader Group leader Group formation characteristics 20 Lehner 2009 Group Lending vs. Individual Lending in Microfinance Preference for individual lending over group lending in the future Preference for individual lending over group lending Group Lending vs. Individual Lending 21 Schurmann and Johnston, ( 2009 ). Group lending model and Social Exclusion: credit access, deprivation, and health in Bangladesh The role of group lending in social exclusion and health risks in Bangladesh Successful experiences in group lending Global experiences in group lending 22 Li, Liu and Deininger 2009 How significant is members' influence in group lending? Estimating a static game of incomplete information The positive role of peer influence in reducing moral hazard The impact of group lending on asymmetric information Financial factors 23 Gine and Karlan, 2010 Joint liability versus individual liability: Long-term evidence from Philippines microfinance group Group lending experience in the Philippines Global experiences in group lending Global experiences in group lending 24 Bhole and Ogden, 2010 Group lending vs. Individual lending with strategic default A model for preferring group lending over individual lending Group Lending vs. Individual Lending Group Lending vs. Individual Lending 25 Abdul Karim 2010 Designing microfinance mechanisms: The role of joint liability and cross-reporting The positive role of joint liability Joint liability Liability 26 van Eijkel, Hermes and Lensink 2011 Group lending and the role of group leader The positive impact of group leader Group leader Group formation characteristics 27 Adusei and Appiah 2011 Determinants of group lending in Ghana's Credit Union Industry Group lending experience in Ghana's Credit Unions Global experiences in group lending Global experiences in group lending 28 Zhao and Gao, 2011 Group lending: Enhancing financial opportunities for SMEs Group lending: A suitable approach for SMEs Successful experiences in group lending Global experiences in group lending 29 Katzur and Lensink 2012 Group lending and the outcomes of related projects The positive impact of positive correlations between project outcomes on group lending efficiency Correlation between projects Group formation characteristics 30 Maisami, Hasanzadeh, and Shahidi-Nasab, 2011 A phased approach to utilizing partnership contracts in Islamic Microfinance A Sequential Fiqh-based approach for group lending Contractual structure of group lending Financial factors 31 Kodongo and Kendi 2013 Individual versus group lending: An evaluation of microfinance data in Kenya Combined group and individual lending policy Combination of group and individual lending Group lending versus individual lending 32 Ahlin 2015 The role of group size in group lending The role of group size Number of group members Group formation characteristics 33 Quidt, Fetzer and Ghatak 2015 Group lending without joint liability Analysis of non-joint liability mechanisms Individual liability Liability 34 Allen 2016 Optimal (partial) group liability in microfinance lending Partial group liability mechanism Liability Liability 35 Marconatto, Barin-Cruz and Pedrozo 2016 Diverse lending groups and social capital in developing and developed countries Social capital in diverse institutional settings Social capital Group formation characteristics 36 Markheim 2017 The role of group size and related project outcomes in group lending Group size and related projects Number of group members and project correlations Group formation characteristics 37 Sharma et al. 2017 Group lending as a solution to mitigate transaction costs The role of group lending in cost reduction The impact of group lending on costs Financial factors 38 Marconatto et al. 2017 Why do microfinance institutions exist? Group lending as a mechanism to enhance symmetric information and operational efficiency Symmetric information The impact of group lending on asymmetric information Financial factors 39 Gan, Hernandez and Liu 2018 Heterogeneous group lending Repayment behavior modeling The impact of group lending on repayment Financial factors 40 Quidt, Fetzer and Ghatak 2018 Commercialization and the decline of joint liability financing Decreasing popularity of joint liability among microfinance institutions Joint liability Liability Quality control In this phase, to maintain research quality, the previous steps were revisited to confirm their accuracy. Both electronic and manual search methods were utilized to identify relevant articles and text. 5. Analysis of research findings Table 3 Level 1 and Level 2 Themes of Group vs. Individual Loaning Level 1 code Level 2code Group lending versus individual lending 1 Preference for individual lending over group lending in the future Preference for individual lending over group lending 2 A model for preferring group lending over individual lending Preference for group lending over individual lending 3 Combined group and individual lending policy Combination of group and individual lending Two microcredit programs can be integrated. Individual loan programs typically have higher interest rates, require collateral, offer greater borrower discretion, and exhibit higher default rates. Microfinance institutions may structure their lending programs to provide credit to groups, thereby initially mitigating repayment risk. Group-based models facilitate more excellent financial stability among individuals. Accordingly, microfinance institutions can identify individuals within groups exhibiting improved credit risk and offer them graduated credit, as Armendáriz and Morduch (2000) proposed. Microfinance institutions can expect higher returns from individual loans. This results in lower delinquency rates, reduced costs, and greater self-sufficiency, as Kodongo and Kendi ( 2013 ) noted. Table 4 Level 1 and Level 2 Themes of Liability Level 1 code Level 2 code liability 1 Partial group liability mechanism liability 2 Analysis of non-joint liability mechanisms Individual liability 3 Decreasing popularity of joint liability among microfinance institutions Joint liability 4 The Positive Role of Joint Liability 5 Sequential financing, peer monitoring, and joint liability 6 The role of joint liability in group lending 7 The positive role of joint liability in peer monitoring While group liability can motivate successful group members to repay the defaulted loans of their peers, it can also create a moral hazard problem. In cases where all group members default, even when individual members would have repaid, the negative consequences of group liability become apparent (Besley & Coate, 1995 ). Lenders with asymmetric information relative to borrowers can leverage joint liability contracts to implement diverse screening mechanisms by fostering endogenous group formation and peer selection. Under conditions of certainty, joint liability can be used as a screening mechanism to help lenders distinguish between heterogeneous borrowers. By offering an appropriate set of loan contracts, the lender can ensure that, in equilibrium, only borrowers with high capacity will accept group loans. Joint liability contracts serve as a screening mechanism for borrowers, not dependent on liability or credit score but rather contingent on the information borrowers possess about one another (Van Tassel, 1999 ). In asymmetric information, group lending with joint liability can enhance efficiency compared to standard debt contracts for diverse borrowers by leveraging local knowledge. Without alternative screening mechanisms like liability, group lending with joint liability becomes the sole appealing lending approach (Ghatak et al., 2005 ). Although higher levels of group liability increase risk sharing within the group, excessive liability can induce strategic default among borrowers (Allen, 2016 ). Table 5 Level 1 and Level 2 Themes of group formation characteristics Level 1code Level 2 code Group formation characteristics 1 The absence of a positive role for the group leader Group leader 2 The positive role of the group leader 3 The role of group size Number of group members 4 Group size and related projects 5 Social capital in diverse institutional settings Social capital 6 Social capital among group members 7 The positive impact of positive correlations between project outcomes on group lending efficiency project correlations 8 Group size and related projects The individual assuming the role of group leader exhibits a higher level of monitoring effort relative to the benchmark. It can be advantageous for the most profitable entrepreneur to volunteer as the group leader. The likelihood that the least profitable borrower is effectively monitored is more significant when the group leader is an outsider; consequently, if the most profitable group member becomes the group leader, it maximizes the probability that the least profitable borrower will exert significant effort on their project (van Eijkel, Hermes & Lensink 2011 ). Provided that borrowers' gross returns are relatively high and group sizes are sufficiently large, this contract leads to fully efficient lending. Nevertheless, increasing group size yields only additional benefits with local information available to the lender. Larger groups may exploit more excellent local information to mitigate adverse selection and benefit from local enforcement to address moral hazard; yet, there are likely constraints. A medium group size is optimal if local information degrades and vanishes with increasing group size. The most significant efficiency gains from larger groups are achieved in groups of fewer than ten members, and accessibility and efficiency improve markedly upon surpassing the median group size threshold (Ahlin, 2015 ). Table 6 Level 1 and Level 2 Themes of financial factors Level 1 code Level 2 code Financial factors 1 The role of group lending in reducing asymmetric information The impact of group lending on asymmetric information 2 The positive impact of group lending on adverse selection when group members know each other 3 The impact of collusion under adverse selection 4 Cross reporting 5 The positive role of peer influence in reducing moral hazard 6 Symmetric information 7 Adverse selection 8 Transaction costs The impact of group lending on costs 9 The role of group lending in cost reduction 10 Increased repayment via group lending The impact of group lending on repayment (Non-default) 11 Repayment behavior modeling 12 The insufficiency of social collateral for improving repayment 13 A Sequential Fiqh-based approach for group lending Contractual structure of group lending Empirical studies have shown that groups with endogenous member selection perform better than those selected by the bank. Endogenous member selection is preferred over random assignment as underinvestment and repayment rate problems may be mitigated (Natarajan, 2004 ). A cross-reporting mechanism is crucial for lenders to mitigate the issue of asymmetric information in the credit market. Effective cross-reporting can incentivize borrowers to be truthful about their project status, thereby reducing defaults and penalties among borrowers. Conversely, cross-reporting is necessary for the lending mechanism to be efficient; borrowers face severe penalties from the bank, and the bank can audit or inspect the project to impose penalties accordingly (Abdul Karim, 2010 ). The impacts of adverse selection and moral hazard on collusion vary. Regarding adverse selection, the incentive for group lending contracts stems from the correlation between information about different entrepreneurs. Hence, the performance of one entrepreneur serves as a valuable signal about both. Optimal (anti-collusion) contracts can exhibit considerable complexity. Specifically, they are valuable not only due to their reliance on signals from entrepreneurs' performance but also because of messages directly transmitted by entrepreneurs; thus, optimal contracts necessitate communication between entrepreneurs and their banks. Conversely, in moral hazard settings where entrepreneurs lack private information from the past, the bank can no longer gain significantly from inducing their effort and actions." (Laffont & Rey 2003). To ensure the financial sustainability of group lending (maximizing outreach and achieving self-sufficiency), transaction costs must be minimized for both lenders and borrowers. The transaction costs of group lending programs vary according to the specific credit delivery mechanisms and the social environment. Transaction cost savings are more likely to be achieved in communities with high levels of social capital. In contrast, communities with low social capital may require higher initial administrative costs to foster trust and cohesion among group members, enabling lenders and borrowers to reduce transaction costs over the loan repayment period. However, these high upfront administrative costs in building group trust and cohesion often result in program failure. What actions can practitioners take to reduce transaction costs? First, for group formation, practitioners may collaborate with community-based organizations, including family planning programs, adult literacy networks, village associations, and agricultural markets, to identify and recruit potential members. Second, the lending program could initially focus on individuals with simple investment projects, as the certification processes preceding lending, business plan development, entrepreneurship training, and technical assistance do not necessitate substantial resources. Third, short-term working capital loans, combined with a lending incentive system, can contribute to a long-term reduction in per-loan transaction costs for the lender. This seems crucial to the financial sustainability of most Latin American Acción programs, where loan officers concentrate on cultivating long-term relationships with borrowers rather than transitioning them to traditional banks once they have established credit history (Bhatt & Tang, 1998 ). Peer pressure is often cited as a reason for the higher repayment rates in group lending programs relative to individual lending. According to the theoretical literature, group members can monitor each other's activities and sanction moral hazard, thus leading to higher repayment rates. Nevertheless, if borrowers are free to select their group, 'peer pressure' cannot compel a borrower who intentionally defaults on an individual loan to repay a group loan. This 'peer pressure' mechanism can enhance repayment rates if financial institutions can improve the efficacy of screening technologies (Sadoulet, 1999 ). Table 7 Level 1 and Level 2 Themes of global experiences in group lending Level 1 code Level 2 code Global experiences in group lending 1 Group lending experience in Ghana's Credit Unions global experiences in group lending 2 Group lending experience in the Philippines 3 Group lending: A suitable approach for SMEs Successful experiences in group lending 4 The role of group lending in social exclusion and health risks in Bangladesh 5 Grameen and Acción International: Successful examples of Group lending 6 Implementation of group lending programs in the United States and Canada Failures of group lending programs After the reported success of initiatives including the Acción International solidarity group program in Latin America and, most prominently, the Grameen Bank in Bangladesh, both of which extend unsecured credit to small groups of micro-entrepreneurs, consistently high loan repayment rates have been attained." (Bhatt & Tang 2001 ). Group lending is a methodology for small and medium-sized enterprises (SMEs) with high repayment rates. Theoretical and empirical studies demonstrate an enhancement of the credit market from the bank's standpoint through group lending, which attests to the informational benefits of group lending. In SMEs, group loans, instead of individual loans, can offer more favorable interest rates to borrowers. Under the voluntary group formation mechanism, SMEs choose to form groups with projects that share similar success probabilities, thereby reducing the information costs incurred by the bank in group evaluation and research. For such groups, group loans can offer more attractive interest rates than individual loans and lower the success thresholds for SME projects; consequently, this enhances the loan access opportunities for SMEs (Zhao & Gao, 2011). A common query is why this form of group lending is not prevalent in developed countries but is primarily observed in developing countries. The answer can be attributed to differing information and contractual environments in developed and developing countries. Developed countries, with their superior asset titles and more robust legal systems, facilitate the use of collateral more readily. In contrast, in developing countries, even if a poor person owns some assets (like a small parcel of land), they often need more necessary institutions to serve as collateral. In addition, developed countries have institutions that foster improved information sharing among lenders (such as credit bureaus). These elements diminish the necessity for contractual arrangements like joint liability to mitigate credit market failures (Ghatak et al., 2005 ). Conclusion This paper conducts a comprehensive thematic analysis of 40 documents retrieved from a database through a meta-synthesis of secondary studies. The table below displays the second and third-level themes of group lending as identified in the analyzed articles: Table 8 Level 1 and Level 2 themes of group lending Level 1 code Level 2 code Group lending 1 Preference for individual lending over group lending Group lending versus individual lending 2 Preference for group lending over individual lending 3 Combination of group and individual lending 4 Individual liability Liability 5 Joint liability 6 Group leader Characteristics of group formation 7 Number of group members 8 Social capital Characteristics of group formation 9 project correlations 10 The impact of group lending on asymmetric information Financial factors 11 The impact of group lending on costs 12 The impact of group lending on repayment (Non-default) 13 Contractual structure of group lending 14 Successful experiences in group lending Global experiences in group lending 15 Failures of group lending programs The research presented in this paper indicates that while there is a substantial body of knowledge on the various facets of group lending, the most critical requirement is adapting this approach to local contexts. In essence, the implementation of group lending mechanisms should be customized to suit the specific environment, as numerous variables within this mechanism vary across different settings and exert both positive and negative influences on the results. Consequently, a primary void in this domain, is the need for domestic research on group lending grounded in data from its implementation within the country. Advances in this area can contribute to enhancing group lending mechanisms. Declarations Author Contribution All authors reviewed the manuscript. References Abdul Karim, Zulkefly (2010). "Microfinance and Mechanism Design: The Role of Joint Liability and Cross-Reporting," Munich Personal RePEc Archive (MPRA). Adusei, M.; Appiah, Sarpong, (2011), " Determinants of Group Lending in the Credit Union Industry in Ghana," Journal of African Business, Vol.12, No.2, pp: 238–251. Ahlin, C., (2015). " The role of group size in group lending," Journal of Development Economics, vol.115, pp:140–155. Allen, T., (2016). " Optimal (Partial) Group Liability in Microfinance Lending," Journal of Development Economics, vol.121, pp: 201–216, doi: 10.1016/j.jdeveco.2015.08.002. Besley, T. and Coate, S. (1995). "Group Lending, Repayment Incentive and Social Collateral" Journal of Development Economics, Vol.46, No.1, pp: 1-18. Bhatt, N. & Tang, S.Y. (1998). "The Problem of Transaction Costs in Group-Based Microlending: An Institutional Perspective" World Development, Vol.26, No.4, pp: 623–637. Bhatt, N. & Tang, S.Y. (2001). "Designing Group-Based Microfinance Program: Some Theoretical and Policy Considerations" International Journal of Public Administration, Vol.24, No.10, pp: 1103–1125. Bhole, B.; Ogden, Sean (2010), " Group lending and individual lending with strategic default," Journal of Development Economics, vol.91, No.2, pp:348–363. Carpenter, Seth, Sadoulet, Loic (2000)." Risk-matching in credit groups: Evidence from Guatemala," Econometric Society World Congress 2000 Contributed Papers 1310, Econometric Society. Cassar, A.; Crowley, Lucas; Wydick, Bruce (2005), "The Effect of Social Capital on Group Loan Repayment: Evidence from Artefactual Field Experiments," Conference on Microfinance and Economic Journal Symposium. Chowdhury, P. R. (2005). "Group-lending: Sequential financing, lender monitoring, and joint liability." Journal of Development Economics 77: pp. 415–439. Conlin, M., (1999). "Peer group micro-lending programs in Canada and the United States" Journal of Development Economics, Vol. 60, No. 1, pp: 249–269. Delgado, E. (2005). " Group Lending: Learning from the International Experience," University of Michigan, www.umich.edu/~econdev/internationalgrouplending. Feigenberg, B., E. Field and R. Pande (2010). "Building Social Capital through Microfinance." Harvard University working paper. Gan, L.; Hernandez, Manuel A.; Liu, Yanyan (2018), " Group Lending With Heterogeneous Types," Econ Inq (Economic Inquiry), vol.56, No.2, pp: 895–913. Ghatak, M. (1999). "Group lending, local information, and peer selection" Journal of Development Economics, Vol. 60, No 1, pp: 27–50. Ghatak, M. and Guinnane, T. (1999). "The Economics of Lending with Joint Liability: Theory and Practice" Journal of Development Economics, Vol. 60, No 1, pp: 195-228. Ghatak, M.; Gangopadhyay, Shubhashis; Lensink, Robert, (2005), " Joint Liability Lending and the Peer Selection Effect," Economic Journal, vol.115, pp: 1005–1015. Gine, X and D. Karlan (2010). "Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending Groups," Journal of Development Economics, vol: 107. Gomez, R. and Santor, E. (2001). "Membership Has Its Privileges: The Effect of Social Capital and Neighborhood Characteristics on the Earning of Microfinance Borrowers" The Canadian Journal of Economics, Vol.34, No. 4, pp: 943-966. Hermes, N.; Lensink, Robert; Mehrteab, Habteab T. (2005), "Peer Monitoring, Social Ties, and Moral Hazard in Group Lending Programs: Evidence from Eritrea," World Development, vol.33, No.1, pp:49–169. Hermes, N.; Lensink, Robert; Mehrteab, Habteab T. (2006), " 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", African Development Review, vol.18, No.1, pp:72–97. Hollis, A. and Sweetman, A. (1998b). "Microcredit in prefamine Ireland" Explorations in Economic History, Vol.35, No. , pp.345-370. Hollis, A. and Sweetman, A., (1998a). "Microcredit: What Can We Learn from the Past?" World Development, Vol. 26, No. 10, pp: 1875-1891. Jaffer, J., (1999). "Microfinance and the Mechanics of Solidarity Lending: Improving Access to Credit through Innovations in Contract Structures." Harvard Law School John M. Olin Center for Law, Economics, and Business Discussion Paper Series. 254. https://lsr.nellco.org/harvard_olin/254. Katzur, T.; Lensink, Robert, (2012), " Group lending with correlated project outcomes," Economics Letters, vol.117, No.2, pp: 445–447. Kibria, N., Lee, S. and R. Olvera, (2003). "Peer Lending Groups and Success: A Case Study of Working Capital", Journal of Developmental Entrepreneurship, Vol. 8, No.1, pp: 41-58. Kodongo, O.; Kendi, Lilian G. (2013), " Individual lending versus group lending: An evaluation with Kenya's microfinance data," Review of Development Finance, vol.3, No.2, pp: 99–108. Laffont, Jean-Jacques & Rey, Patrick, (2003). "Moral Hazard, Collusion and Group Lending," IDEI Working Papers 122, Institut d'Économie Industrielle (IDEI), Toulouse. Laffont, Jean-Jacques; N’Guessan, Tchétché (2000), "Group Lending with Adverse Selection", European Economic Review, vol.44, pp.773–784. Lehner, M. (2009). "Group Lending versus Individual Lending in Microfinance," SFB/TR 15 Discussion Paper, No. 299, Sonderforschungsbereich/Transregio 15 Governance and the Efficiency of Economic Systems, München, http://nbn-resolving.de/urn:nbn:de:bvb:19-epub-13255-5. Li, Shanjun; Liu, Yanyan; Deininger, Klaus W. (2009), " How Important are Peer Effects in Group Lending? Estimating a Static Game of Incomplete Information", International Association of Agricultural Economists Conference, Beijing, China. Marconatto, D.; Barin Cruz, Luciano; Gressler Teixeira, Emidio; Moura, Gilnei (2017), "Why the microfinance institutions exist: lending groups as a mechanism to enhance informational symmetry and enforcement activities," Organização & Sociedade, 24. Marconatto, Diego; Barin Cruz, Luciano; Pedrozo, Eugenio (2016), " Lending Groups and Different Social Capitals in Developed and Developing Countries", Rev. adm. contemp. (Revista de Administração Contemporânea), 20:6, 651–672. Markheim, M., (2017). "The Role of Group Size and Correlated Project Outcomes in Group Lending," Theoretical Economics Letters, vol.7, pp: 1189–1200. Natarajan, Kartik (2004). "Can Group Lending Overcome Adverse Selection Problems?" Centre for Financial and Management Studies 5 SOAS, University of London. Quidt, J. de; Fetzer, Thiemo; Ghatak, Maitreesh (2015), "Group lending without joint liability," Journal of Development Economics, vol.121, pp.217–236. Quidt, J. de; Fetzer, Thiemo; Ghatak, Maitreesh, (2018), " Commercialization and the decline of joint liability microcredit," Journal of Development Economics, vol.134, pp:209–225. Rai, A. and T. Sjostrom (2004). "Is Grameen Lending Efficient? Repayment Incentives and Insurance in Village Economies." Review of Economic Studies 71 (1): 217-234. Sadoulet, Loic, (1999). "Equilibrium Risk-Matching in Group Lending," Econometric Society World Congress 2000 Contributed Papers 1302, Econometric Society. Schurmann, A. T.; Johnston, Heidi Bart (2009), "The Group-lending Model and Social Closure: Microcredit, Exclusion, and Health in Bangladesh," Journal of Health, Population, and Nutrition, vol.27, No.4, pp: 518–527. Sharma, S., Singh, P., Singh, K., Chauhan, B. (2017). "Group Lending Model - A Panacea to Reduce Transaction Cost?" Zagreb International Review of Economics and Business, vol: 20, num: pp. 2, 49–63. Van Eijkel, Remco; Hermes, Niels; Lensink, Robert, (2011), " Group lending and the role of the group leader," Small Bus Econ (Small et al.), vol.36, No.3, ppp:299–321. Van Tassel, Eric (1999). "Group Lending Under Asymmetric Information" Journal of Development Economics, Vol. 60, No 1, pp: 1-25. Varian, H. (1990). "Monitoring Agents with Other Agents" Journal of Institutional and Theoretical Economics, Vol.146, No. 1, pp: 153–174. Woolcock, M. (1999). "Learning from Failures in Microfinance: What Unsuccessful Cases Tell Us About How Group-Based Program Work" The American Journal of Economics and Sociology, Vol.58, No.1, pp: 17–42. Zeller, M., (2001). "Promoting Institutional Innovation in Microfinance," Development and Cooperation, No.1, 2001, pp: 9–11. Zhao, G.; Gao, Yaqin, (2011), "Group lending: Improving the opportunity of SMEs finance," International Conference on E-Business and E-Government, ICEE2011 – Proceedings. Monetary and Banking Research Center (2018). 'Designing a Social Banking Business Model for Resalat Islamic Microfinance Bank with a Focus on Providing Microfinance Services to Group Customers,' commissioned by Resalat Islamic Microfinance Bank. Motevaselli, M., & Aghababaei, R. (2008). Investigating the characteristics of successful microfinance models to determine critical success factors. Economic Research Vol. 43, No.2. Misami, H., Hasan Zadeh, A., & Shahidi-Nasab, M. (2012). A phased approach to using participatory contracts in Islamic microfinance. Strategic Management Thought, No.2. Footnotes https://jstor.org https://sciencedirect.com https://journals.sagepub.com https://emerald.com/insight https://scholar.google.com https://link.springer.com https://onlinelibrary.wiley.com https://tandfonline.com https://www.sid.ir/ https://www.noormags.ir/ https://en.civilica.com/ https://irandoc.ac.ir/ Citavi Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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Introduction","content":"\u003cp\u003eFinancial institutions can generally adopt two approaches for managing loan and deposit processes: individual and group-based customer interactions. The first approach, which is the prevailing method in conventional banking, involves managing operational processes on an individual basis.\u003c/p\u003e \u003cp\u003eMicrofinance institutions have widely implemented the solidarity group model, the second method. Three operational arrangements can be identified within this model, differing in the distribution of costs associated with loan disbursement and deposit-taking. The first arrangement, the self-help group model, involves a group of 10 to 20 individuals forming a collective that enters into a group contract with a bank to access credit and savings services. It is essential to emphasize that the relationship between the group and the bank is established at the group level, with no individual members having direct relationships with the bank. This model, known as the linkage model, demands close social interactions and strong social bonds among group members. NABARD, the primary bank in India, was the first to implement the program of linking banks with self-help groups in 1992(Motevaselli \u0026amp; Aghababaei, 1387, pp. 26\u0026ndash;28, citing Zeller, \u003cspan citationid=\"CR47\" class=\"CitationRef\"\u003e2001\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThe second type of arrangement, adopted by the traditional Grameen Bank model (pre-2000) and Acci\u0026oacute;n International, is characterized by groups of 4 to 10 self-selected members (5 in Grameen, 5\u0026ndash;10 in Acci\u0026oacute;n). In this model, loans are provided to individuals, yet the entire group bears joint responsibility for repayment. Social cohesion is essential to enforce repayment by applying pressure and penalties on defaulting members. This method is termed the individual/group lending model (Motevaselli \u0026amp; Aghababaei, 1387, pp. 26\u0026ndash;28, citing Zeller, \u003cspan citationid=\"CR47\" class=\"CitationRef\"\u003e2001\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThe third type of group lending arrangement, lacking joint liability, is characterized by self-selected groups. The current Grameen II model (implemented since 2000) is a prime example. In this model, the group primarily fosters community, cultivates an entrepreneurial identity, establishes networks, provides mutual support, and facilitates entrepreneurial training. This method can be viewed as a variant of individual lending (Motevaselli \u0026amp; Aghababaei, 1387, pp. 26\u0026ndash;28, citing Conlin, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e1999\u003c/span\u003e; Kibria et al., \u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2003\u003c/span\u003e). The most distinguishing feature common to these three arrangements is the absence of the need for traditional banking collateral, which differentiates them from other lending modalities.\u003c/p\u003e \u003cp\u003eThe underlying reason for the adoption of this mechanism was the numerous challenges faced by the banking system and society, including limited credit access for the poor, inadequate financing for low-income entrepreneurs, decreasing social interaction, elevated credit and default risks for banks, increased transaction costs, intricate and costly collateral and guarantee processes for loans, and information asymmetry leading to adverse selection and moral hazard among clients. These factors have been pivotal in driving some institutions to transition from conventional banking to this alternative approach. This mechanism was first introduced by the Grameen Bank of Bangladesh in 1976 under the leadership of Muhammad Yunus. Subsequently, banks worldwide have adopted and modified this approach. In Iran, the Agricultural Bank of Iran had already implemented this mechanism before the Islamic Revolution (around 1971). However, more documentation regarding its implementation needs to be published.\u003c/p\u003e \u003cp\u003eThis research seeks to categorize and review the literature on group lending, providing a comprehensive overview of existing research and highlighting the weaknesses, overlooked areas, and strengths within this domain. The objective is to address the significant knowledge gaps in the country regarding group lending and to promote and develop this model among domestic banks, particularly for microcredit and lending to underprivileged individuals.\u003c/p\u003e"},{"header":"2. Literature review","content":"\u003cp\u003eA comprehensive systematic review of the domestic and international literature on group lending is yet to be undertaken.\u003c/p\u003e"},{"header":"3. Theoretical Literature","content":"\u003cp\u003eBhatt \u0026amp; Tang (\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e1998\u003c/span\u003e, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2001\u003c/span\u003e) argued that group lending can be categorized into three types: 1. Group loans with group liability, 2. Individual loans within a group with joint group liability, and 3. Individual loans within a group with individual liability. The strength of social relationships and the level of social capital are significant factors in determining the choice among these three methods (Woolcock, \u003cspan citationid=\"CR46\" class=\"CitationRef\"\u003e1999\u003c/span\u003e).\u003c/p\u003e \u003cdiv id=\"Sec4\" class=\"Section2\"\u003e \u003ch2\u003e\u003cb\u003e3.1 The benefits of group-based customer targeting\u003c/b\u003e\u003c/h2\u003e \u003cdiv id=\"Sec5\" class=\"Section3\"\u003e \u003ch2\u003e\u003cb\u003e3.1.1 Internal dimensions of banking\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eThe overwhelming number of individual customers visiting bank branches, coupled with limitations on hiring new staff and opening additional branches, has resulted in suboptimal customer service. Banks can adopt a group-based service model to overcome this challenge, thereby reducing individual customer visits. By designing effective processes and structures and leveraging information technology, banks can improve customer service, gradually downsize their branch network, and reduce operational costs (Monetary and Banking Research Institute, 2018).\u003c/p\u003e \u003cdiv id=\"Sec6\" class=\"Section4\"\u003e \u003ch2\u003e\u003cb\u003e3.1.1.1 Transaction costs\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eGroup lending has been the subject of extensive research, with transaction costs being a key area of focus. Coase's theorem (1937) suggests that the frequency and complexity of transactions shape the contracts employed, each with its unique enforcement mechanisms and associated transaction costs for the parties involved. Thus, the optimal contract minimizes transaction costs. When compared to individual lending, group lending methods offer the advantage of lower transaction costs. Moreover, group lending mitigates the complexities involved in financial transactions (Bhatt \u0026amp; Tang, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2001\u003c/span\u003e, p. 1110). From a lender's standpoint, group lending methods entail lower operational costs due to reduced customer screening, monitoring, and evaluation requirements, with many of these tasks being delegated to the borrowers.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec7\" class=\"Section4\"\u003e \u003ch2\u003e\u003cb\u003e3.1.1.2 Mitigating Asymmetric Information Issues\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eThe problem of asymmetric information is a crucial driver of the adoption of group lending. Traditional banking systems primarily rely on two strategies to mitigate adverse selection and moral hazard: credit scoring and collateral. Credit scoring involves using experts to assess borrowers' creditworthiness, whereas collateral is used to mitigate moral hazard and encourage loan repayment. However, research findings suggest that group lending, with its distinctive features of joint liability and peer selection, effectively mitigates adverse selection and moral hazard, ensuring contract enforcement. One of the core principles of group lending is peer selection. Borrowers tend to form groups with individuals with similar risk characteristics and commitment levels. Group members monitor each other's activities, offer support, and ensure everyone contributes to the group's success. In communities with strong social bonds (such as rural communities, factory workers, hospital staff, or school teachers), the shared commitment can create significant social pressure on members who fail to meet their obligations. Peer monitoring is a crucial element in the effectiveness of this mechanism. The ability of borrowers to monitor each other's investment behavior throughout the repayment period is essential. Peer pressure is another vital component of this mechanism. When borrowers cannot threaten to exclude their peers from the group, the likelihood of moral hazard increases. Additionally, peer pressure discourages default, as borrowers understand that if one member defaults, the remaining members must repay. Social sanctions and the resulting reputational harm provide a robust enforcement mechanism to ensure commitment. Therefore, the joint liability feature promotes the formation of groups composed of homogeneous individuals (Aghababaei \u0026amp; Motevaselli, 2007, pp. 19\u0026ndash;25; Delgado, \u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e2005\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eDrawing on experiences with credit unions, researchers have suggested that joint liability can function as a tool for creating homogeneity among group members, thus contributing to the group's success (Hollis \u0026amp; Sweetman, 1998).\u003c/p\u003e \u003c/div\u003e \u003c/div\u003e \u003cdiv id=\"Sec8\" class=\"Section3\"\u003e \u003ch2\u003e3.1.2 Social dimension\u003c/h2\u003e \u003cp\u003eA second criterion for targeting group clients is focusing on identity formation and community strengthening through group-based financial services. By providing financial services to a group, linking individual credit to group credit, and establishing internal control mechanisms within groups, cooperation and solidarity among individuals and communities can be enhanced (Monetary and Banking Research Institute, 2018). The social benefits of group meetings are well-documented: Feigenberg et al. (\u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2010\u003c/span\u003e) found that weekly meetings, as compared to monthly ones, fostered increased social interactions and risk-sharing among group members.\u003c/p\u003e \u003cdiv id=\"Sec9\" class=\"Section4\"\u003e \u003ch2\u003e\u003cb\u003e3.1.2.1 Group membership effects\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eA crucial benefit of group lending is the effect of group membership. Varian (\u003cspan citationid=\"CR45\" class=\"CitationRef\"\u003e1990\u003c/span\u003e) finds that the incentive to increase the repayment probability of other group members induces more productive individuals to transfer necessary knowledge to less productive ones, thereby improving the latter's productivity. Empirical studies have corroborated this theoretical result from Varian's model. As shown in studies by Kibria et al. (\u003cspan citationid=\"CR27\" class=\"CitationRef\"\u003e2003\u003c/span\u003e) on U.S. group lending programs and Gomez and Santor (\u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2001\u003c/span\u003e) on the Canadian context, a key outcome of group dynamics is the creation of networks and mutual support systems. By sharing knowledge and experiences, members can effectively address many specialized challenges and problems within their respective groups. Developing a shared entrepreneurial identity and a sense of community among group members following initial meetings fosters trust and collaboration.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec10\" class=\"Section4\"\u003e \u003ch2\u003e3.1.2.2 Maintaining group cohesion and enhancing positive intra-group relationships\u003c/h2\u003e \u003cp\u003eA significant benefit of offering services to customer groups lies in the pre-existing social networks and relationships within these groups. Furthermore, group leaders can act as intermediaries between the bank and customers, enhancing service delivery and reducing the bank's lending exposure. Strong, positive relationships among group members promote increased social interaction and participation within and between members and group leaders, leading to greater group cohesion. This increased cohesion enhances cooperation between group members, leaders, and the bank. Group members are likelier to exhibit positive credit behavior within their social circles. Furthermore, in the event of a loan default by one member, others are more likely to provide support. Ultimately, the bank can more effectively collect outstanding loans through group leaders who act as bank representatives within the group (Monetary and Banking Research Institute, 2018).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec11\" class=\"Section4\"\u003e \u003ch2\u003e\u003cb\u003e3.2.1.3 Promoting members' social participation\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eIn this model, both the bank and customers stand to gain, as certain banking operations, such as account opening and loan application, are delegated to customers, particularly group leaders. However, the specific extent of delegation may differ across various group lending models. From the beginning of their interaction with the bank, all group members, leaders, and facilitators are provided with comprehensive information about group formation and the services they will receive. As a result, voluntary social participation will be established among all group members, motivated to obtain more accessible and cheaper banking services. Cultural adaptation, education, information dissemination to groups concerning various banking matters, and recognition and rewards for group leaders, including material and non-material incentives, will promote increased social participation among group members (Monetary and Banking Research Institute,2018).\u003c/p\u003e \u003c/div\u003e \u003c/div\u003e \u003c/div\u003e"},{"header":"4. Research methodology","content":"\u003cp\u003eThis study takes an interpretive philosophical stance and employs an inductive logic. Its primary objective is applied. It adopts a systematic review approach and utilizes meta-synthesis as its research strategy. Thematic analysis was employed to analyze the data. Secondary data sources such as articles and books were used for the meta-synthesis. Secondary research data are essential for systematic reviews, as they facilitate the identification of research gaps in previous studies and enable the organization and utilization of existing knowledge. Systematic reviews have become increasingly prevalent. This study will adopt a meta-synthesis approach, a sub-strategy of systematic reviews. The research process was defined, coded, and modeled using MaxQDA software.\u003c/p\u003e \u003cp\u003e \u003cb\u003eMeta-synthesis protocol\u003c/b\u003e \u003c/p\u003e \u003cp\u003eIn English and Persian documents, each study and secondary data related to group lending were meticulously reviewed for this research. Systematic reviews allow the banking research community to gain insights into past research and experiences with group lending in banks worldwide. The meta-synthesis procedure followed in this study is:\u003c/p\u003e\n\u003col\u003e\n \u003cli\u003eConstructing research questions aligned with objectives and research issues;\u003c/li\u003e\n \u003cli\u003eA systematic review of group lending literature\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003e- Identifying keywords;\u003c/p\u003e\n\u003cp\u003e- Identifying reliable databases and applying both manual and automated\u0026nbsp;\u003c/p\u003e\n\u003cp\u003esearch method;\u003c/p\u003e\n\u003col start=\"3\"\u003e\n \u003cli\u003eExamining inclusion and exclusion criteria for studies;\u003c/li\u003e\n \u003cli\u003eIdentifying relevant studies;\u003c/li\u003e\n \u003cli\u003eDeriving codes and concepts from documents;\u003c/li\u003e\n \u003cli\u003eQuality Control;\u003c/li\u003e\n \u003cli\u003eAnalysis of data to address research objectives.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003e \u003cb\u003eData analysis\u003c/b\u003e \u003c/p\u003e \u003cp\u003eA meta-analysis approach was employed to systematically review past research and experiences of group lending in global banks. This process involved:\u003c/p\u003e \u003cp\u003e \u003cb\u003eResearch questions\u003c/b\u003e \u003c/p\u003e \u003cp\u003e \u003col\u003e \u003cli\u003e \u003cp\u003eWhat are the critical research areas regarding the mechanisms of group lending that have been investigated in reputable academic journals?\u003c/p\u003e \u003c/li\u003e\u003cli\u003eWhat are the research gaps in the field of group lending?\u003c/li\u003e \u003c/ol\u003e \u003c/p\u003e\n\u003cp\u003e \u003cb\u003eA systematic review of literature on group lending\u003c/b\u003e \u003c/p\u003e \u003cp\u003eEligible studies were chosen for meta-analysis at this stage, and inclusion and exclusion criteria were defined. Subsequently, the researcher focused their targeted search on published studies across diverse sources, identifying relevant keywords. This study identified published sources through credible databases and academic search engines. The search process and its steps are outlined below.\u003c/p\u003e \u003cp\u003e \u003cb\u003eIdentifying relevant keywords\u003c/b\u003e \u003c/p\u003e \u003cp\u003eA systematic literature review was conducted to identify relevant studies on group lending. Keywords were identified based on prior research and searched in titles according to a predefined protocol. Boolean operators were utilized to refine the search and ensure a comprehensive literature review.\u003c/p\u003e \u003cp\u003e \u003cb\u003eIdentifying reliable databases and applying search method\u003c/b\u003e \u003c/p\u003e \u003cp\u003eThe titles, abstracts, and keywords of documents in information databases were searched for terms related to the research. The search terms included \"group lending,\" \"solidarity group,\" \"joint liability,\" \"group loans,\" \"solidarity lending,\" \"group-based credit,\" and \"collective responsibility. \"Sources and documents with titles that initially matched the keywords were given priority in the review process. English-language articles were searched in JSTOR\u003csup\u003e4\u003c/sup\u003e, ScienceDirect\u003csup\u003e5\u003c/sup\u003e, Sage\u003csup\u003e6\u003c/sup\u003e, Emerald\u003csup\u003e7\u003c/sup\u003e, Google Scholar\u003csup\u003e8\u003c/sup\u003e, Springer\u003csup\u003e9\u003c/sup\u003e, Wiley\u003csup\u003e10\u003c/sup\u003e, and Taylor \u0026amp; Francis\u003csup\u003e11\u003c/sup\u003e. Domestic databases such as the Islamic Republic of Iran Jihad for University's Scientific Information Database\u003csup\u003e12\u003c/sup\u003e, NoorMag\u003csup\u003e13\u003c/sup\u003e, Civilica\u003csup\u003e14\u003c/sup\u003e, IranDoc\u003csup\u003e15\u003c/sup\u003e, and the National Library was used to search for Persian sources. The combined results of searching and examining keywords in various databases yielded 764 documents. All retrieved documents were saved in the CITAVI software to analyze and evaluate the meta-synthesis approach.\u003c/p\u003e \u003cp\u003e \u003cb\u003eselection criteria for studies\u003c/b\u003e \u003c/p\u003e \u003cp\u003eThe goal of identifying criteria is to review research in meta-synthesis systematically. Two primary criteria for study selection are proposed: a) Inclusion criteria: The objective of inclusion criteria is to specify the standards by which studies will be included in the review. The inclusion criteria for this study are:\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003ePeer-reviewed and published articles in reputable international journals;\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eArticles that focus on group lending;\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eStudies that directly answer the research questions;\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eArticles derived from doctoral dissertations and theses published in reputable journals;\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003ePersian articles published in journals approved by the Ministry of Science;\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003eb) Exclusion criteria: Certain studies must be excluded from the meta-synthesis analysis. These criteria include:\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003eArticles written in languages other than Persian or English;\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003eArticles that are outside the scope of the research topic.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003e \u003cb\u003eIdentifying relevant studies\u003c/b\u003e \u003c/p\u003e \u003cp\u003eThe corpus of articles was imported into Citavi 6\u003csup\u003e16\u003c/sup\u003e, a knowledge management and bibliographic software. Relevant keywords were extracted and classified for each article. The software enabled the categorization of the collected data. Subsequently, the analyses were adjusted or compared during the research process, leading to the integration of certain concepts. The results are summarized in the table below:\u003c/p\u003e \n\u003cp\u003e\u003cstrong\u003eTable 1:\u0026nbsp;\u003c/strong\u003eResults of a search for group lending in selected databases\u003c/p\u003e\n\u003cp\u003e\u003cimg 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\" width=\"683\" height=\"116\"\u003e\u003c/p\u003e\n \u003cp\u003eA preliminary search identified 764 potential documents. After reviewing titles, 197 documents were selected for their relevance to the research topic.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003e \u003cstrong\u003eDiagram 1\u003c/strong\u003e \u003cp\u003eProcess of identifying and selecting final documents in meta-synthesis\u003c/p\u003e \u003c/p\u003e \u003cp\u003eAfter removing duplicate records from each database, the dataset was narrowed to 144 documents for further examination. A second review excluded 26 documents deemed irrelevant to the research objectives. Consequently, 118 documents were subjected to a content analysis. After thoroughly evaluating each title, 40 documents were ultimately selected for meta-analysis and the application of group facilitation methods.\u003c/p\u003e \u003cp\u003e \u003cb\u003eDeriving codes and concepts from documents\u003c/b\u003e \u003c/p\u003e \u003cp\u003eThe codes derived from the articles were inputted into the MaxQDA software for analysis. The software generated base codes and code groups corresponding to themes and higher-level categories. These results were subjected to further analysis in the following stage.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eGroup lending studies\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"6\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAuthors\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eResearch topic\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCode 1\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003eCode 2\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eCode 3\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBesley and\u003c/p\u003e \u003cp\u003eCoate 1995\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending, repayment incentives, and social collateral\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eIncreased repayment via group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on repayment\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBhatt and\u003c/p\u003e \u003cp\u003eTang 1998\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eTransaction costs challenges in group-based microfinance: An institutional perspective.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eTransaction costs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on costs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eVan Tassel\u003c/p\u003e \u003cp\u003e1999\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending under asymmetric information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive role of joint liability in peer\u003c/p\u003e \u003cp\u003emonitoring\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e 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\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe Positive Role of Joint Liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGhatak \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e1999\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending, local information, and peer selection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe role of group lending in reducing asymmetric information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eJaffer \u003cspan citationid=\"CR25\" class=\"CitationRef\"\u003e1999\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMicrofinance and joint liability lending mechanisms: Enhancing Access to credit through contractual innovation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive role of joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e 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align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMoral hazard, collusion, and group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe impact of collusion under adverse selection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric\u003c/p\u003e \u003cp\u003einformation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRai and Sjostrom \u003cspan citationid=\"CR39\" class=\"CitationRef\"\u003e2004\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIs Grameen lending effective? Repayment incentives and insurance in rural economies\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCross reporting\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric\u003c/p\u003e \u003cp\u003einformation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e14\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNatarajan \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e2004\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eCan group lending overcome the problem of adverse selection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eAdverse selection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric\u003c/p\u003e \u003cp\u003einformation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e15\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCassar, Crowley, and Wydick, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2005\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eThe impact of social capital on group loan repayment: Evidence from field experiment\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSocial capital among group members\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eSocial capital\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eCharacteristics of group formation\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e16\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eChowdhury \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2005\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending: Sequential financing, peer monitoring, and joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSequential financing, peer monitoring, and joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e17\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGhatak, Gangopadhyay and Lensink \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2005\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eJoint Liability Lending: The Impact of Peer Selection\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive role of joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e18\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eHermes, Lensink and Mehrteab \u003cspan citationid=\"CR21\" 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colname=\"c3\"\u003e \u003cp\u003eDoes the Group Leader Matter? The Impact of Leader\u0026rsquo;s Monitoring, Activities, and Social Relationships on Group Loan Repayment Performance in Eritrea\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe absence of a positive role for the group leader\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eGroup leader\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e20\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLehner \u003cspan citationid=\"CR31\" class=\"CitationRef\"\u003e2009\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup Lending vs. Individual Lending in Microfinance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003ePreference for individual lending over group lending in the future\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003ePreference for individual lending over group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup Lending vs. Individual Lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e21\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSchurmann and Johnston, (\u003cspan citationid=\"CR41\" class=\"CitationRef\"\u003e2009\u003c/span\u003e).\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending model and Social Exclusion: credit access, deprivation, and health in Bangladesh\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe role of group lending in social exclusion and health risks in Bangladesh\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eSuccessful experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e22\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLi, Liu and Deininger \u003cspan citationid=\"CR32\" class=\"CitationRef\"\u003e2009\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eHow significant is members' influence in group lending? Estimating a static game of incomplete information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive role of peer influence in reducing moral hazard\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric\u003c/p\u003e \u003cp\u003einformation\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e23\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGine and Karlan, \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2010\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eJoint liability versus individual liability: Long-term evidence from Philippines microfinance group\u003c/p\u003e \u003c/td\u003e 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align=\"left\" colname=\"c5\"\u003e \u003cp\u003eGroup Lending vs. Individual Lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup Lending vs. Individual Lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e25\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAbdul Karim \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2010\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eDesigning microfinance mechanisms: The role of joint liability and cross-reporting\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive role of joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e26\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003evan Eijkel, Hermes\u003c/p\u003e \u003cp\u003eand Lensink 2011\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending and the role of group leader\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive impact of group leader\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eGroup leader\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e27\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAdusei and Appiah 2011\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eDeterminants of group lending in Ghana's Credit Union Industry\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eGroup lending experience in Ghana's Credit Unions\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e28\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eZhao and Gao, 2011\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending: Enhancing financial opportunities for SMEs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eGroup lending: A suitable approach for SMEs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eSuccessful experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e29\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eKatzur and Lensink \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2012\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending and the outcomes of related projects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe positive impact of positive correlations between project outcomes on group lending efficiency\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eCorrelation between projects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e30\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMaisami, Hasanzadeh, and Shahidi-Nasab, 2011\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eA phased approach to utilizing partnership contracts in Islamic\u003c/p\u003e \u003cp\u003eMicrofinance\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eA Sequential Fiqh-based approach for group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eContractual structure of group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e31\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eKodongo and Kendi \u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2013\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIndividual versus group lending: An evaluation of microfinance data in Kenya\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eCombined group and individual lending policy\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eCombination of group and individual lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup lending versus individual lending\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e32\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAhlin \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2015\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eThe role of group size in group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe role of group size\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eNumber of group members\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e33\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eQuidt, Fetzer and Ghatak \u003cspan citationid=\"CR37\" class=\"CitationRef\"\u003e2015\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending without joint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eAnalysis of non-joint liability mechanisms\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eIndividual liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e34\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAllen \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2016\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eOptimal (partial) group liability in microfinance lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003ePartial group liability mechanism\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e35\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMarconatto, Barin-Cruz and Pedrozo 2016\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eDiverse lending groups and social capital in developing and developed countries\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSocial capital in diverse institutional settings\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eSocial capital\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e36\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMarkheim \u003cspan citationid=\"CR35\" class=\"CitationRef\"\u003e2017\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eThe role of group size and related project outcomes in group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eGroup size and related projects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eNumber of group members and project correlations\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e37\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSharma et al. \u003cspan citationid=\"CR42\" class=\"CitationRef\"\u003e2017\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eGroup lending as a solution to mitigate transaction costs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eThe role of group lending in cost reduction\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on costs\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e38\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eMarconatto et al. \u003cspan citationid=\"CR33\" class=\"CitationRef\"\u003e2017\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eWhy do microfinance institutions exist?\u003c/p\u003e \u003cp\u003eGroup lending as a mechanism to enhance symmetric information and operational efficiency\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSymmetric information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on asymmetric information\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e39\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGan, Hernandez and Liu \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2018\u003c/span\u003e\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eHeterogeneous group lending\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eRepayment behavior modeling\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eThe impact of group lending on repayment\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e40\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eQuidt, Fetzer and Ghatak 2018\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eCommercialization and the decline of joint liability financing\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eDecreasing popularity of joint liability among microfinance institutions\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cb\u003eQuality control\u003c/b\u003e \u003c/p\u003e \u003cp\u003eIn this phase, to maintain research quality, the previous steps were revisited to confirm their accuracy. Both electronic and manual search methods were utilized to identify relevant articles and text.\u003c/p\u003e"},{"header":"5. Analysis of research findings","content":"\u003cp\u003e \u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 Themes of Group vs. Individual Loaning\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"3\" rowspan=\"4\"\u003e \u003cp\u003eGroup lending versus individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePreference for individual lending over group lending in the future\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003ePreference for individual lending over group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA model for preferring group lending over individual lending\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003ePreference for group lending over individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCombined group and individual lending policy\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eCombination of group and individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e \u003cp\u003e\u003c/p\u003e \u003cp\u003eTwo microcredit programs can be integrated. Individual loan programs typically have higher interest rates, require collateral, offer greater borrower discretion, and exhibit higher default rates. Microfinance institutions may structure their lending programs to provide credit to groups, thereby initially mitigating repayment risk. Group-based models facilitate more excellent financial stability among individuals. Accordingly, microfinance institutions can identify individuals within groups exhibiting improved credit risk and offer them graduated credit, as Armendáriz and Morduch (2000) proposed. Microfinance institutions can expect higher returns from individual loans. This results in lower delinquency rates, reduced costs, and greater self-sufficiency, as Kodongo and Kendi (\u003cspan citationid=\"CR28\" class=\"CitationRef\"\u003e2013\u003c/span\u003e) noted.\u003c/p\u003e \u003cp\u003e \u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 Themes of Liability\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"7\" rowspan=\"8\"\u003e \u003cp\u003eliability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePartial group liability mechanism\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eliability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAnalysis of non-joint liability mechanisms\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eIndividual liability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eDecreasing popularity of joint liability among microfinance institutions\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"4\" rowspan=\"5\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe Positive Role of Joint Liability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSequential financing, peer monitoring, and joint liability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe role of joint liability in group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe positive role of joint liability in peer\u003c/p\u003e \u003cp\u003emonitoring\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e \u003cp\u003e\u003c/p\u003e \u003cp\u003eWhile group liability can motivate successful group members to repay the defaulted loans of their peers, it can also create a moral hazard problem. In cases where all group members default, even when individual members would have repaid, the negative consequences of group liability become apparent (Besley \u0026amp; Coate, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e1995\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eLenders with asymmetric information relative to borrowers can leverage joint liability contracts to implement diverse screening mechanisms by fostering endogenous group formation and peer selection. Under conditions of certainty, joint liability can be used as a screening mechanism to help lenders distinguish between heterogeneous borrowers. By offering an appropriate set of loan contracts, the lender can ensure that, in equilibrium, only borrowers with high capacity will accept group loans. Joint liability contracts serve as a screening mechanism for borrowers, not dependent on liability or credit score but rather contingent on the information borrowers possess about one another (Van Tassel, \u003cspan citationid=\"CR44\" class=\"CitationRef\"\u003e1999\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eIn asymmetric information, group lending with joint liability can enhance efficiency compared to standard debt contracts for diverse borrowers by leveraging local knowledge. Without alternative screening mechanisms like liability, group lending with joint liability becomes the sole appealing lending approach (Ghatak et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2005\u003c/span\u003e). Although higher levels of group liability increase risk sharing within the group, excessive liability can induce strategic default among borrowers (Allen, \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2016\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 Themes of group formation characteristics\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"8\" rowspan=\"9\"\u003e \u003cp\u003eGroup formation characteristics\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe absence of a positive role for the group leader\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eGroup leader\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe positive role of the group leader\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe role of group size\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eNumber of group members\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup size and related projects\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSocial capital in diverse institutional settings\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eSocial capital\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSocial capital among group members\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe positive impact of positive correlations between project outcomes on group lending efficiency\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eproject correlations\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup size and related projects\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e \u003cp\u003e\u003c/p\u003e \u003cp\u003eThe individual assuming the role of group leader exhibits a higher level of monitoring effort relative to the benchmark. It can be advantageous for the most profitable entrepreneur to volunteer as the group leader. The likelihood that the least profitable borrower is effectively monitored is more significant when the group leader is an outsider; consequently, if the most profitable group member becomes the group leader, it maximizes the probability that the least profitable borrower will exert significant effort on their project (van Eijkel, Hermes \u0026amp; Lensink \u003cspan citationid=\"CR43\" class=\"CitationRef\"\u003e2011\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eProvided that borrowers' gross returns are relatively high and group sizes are sufficiently large, this contract leads to fully efficient lending. Nevertheless, increasing group size yields only additional benefits with local information available to the lender. Larger groups may exploit more excellent local information to mitigate adverse selection and benefit from local enforcement to address moral hazard; yet, there are likely constraints. A medium group size is optimal if local information degrades and vanishes with increasing group size. The most significant efficiency gains from larger groups are achieved in groups of fewer than ten members, and accessibility and efficiency improve markedly upon surpassing the median group size threshold (Ahlin, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2015\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 Themes of financial factors\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"13\" rowspan=\"14\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe role of group lending in reducing asymmetric information\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"6\" rowspan=\"7\"\u003e \u003cp\u003eThe impact of group lending on asymmetric information\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe positive impact of group lending on adverse selection when group members know each other\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe impact of collusion under adverse selection\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCross reporting\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe positive role of peer influence in reducing moral hazard\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSymmetric information\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eAdverse selection\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eTransaction costs\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eThe impact of group lending on costs\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e9\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe role of group lending in cost reduction\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e10\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIncreased repayment via group lending\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003eThe impact of group lending on repayment (Non-default)\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e11\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eRepayment behavior modeling\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e12\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe insufficiency of social collateral for improving repayment\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eA Sequential Fiqh-based approach for group lending\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eContractual structure of group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e \u003cp\u003e\u003c/p\u003e \u003cp\u003eEmpirical studies have shown that groups with endogenous member selection perform better than those selected by the bank. Endogenous member selection is preferred over random assignment as underinvestment and repayment rate problems may be mitigated (Natarajan, \u003cspan citationid=\"CR36\" class=\"CitationRef\"\u003e2004\u003c/span\u003e). A cross-reporting mechanism is crucial for lenders to mitigate the issue of asymmetric information in the credit market. Effective cross-reporting can incentivize borrowers to be truthful about their project status, thereby reducing defaults and penalties among borrowers. Conversely, cross-reporting is necessary for the lending mechanism to be efficient; borrowers face severe penalties from the bank, and the bank can audit or inspect the project to impose penalties accordingly (Abdul Karim, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2010\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThe impacts of adverse selection and moral hazard on collusion vary. Regarding adverse selection, the incentive for group lending contracts stems from the correlation between information about different entrepreneurs. Hence, the performance of one entrepreneur serves as a valuable signal about both. Optimal (anti-collusion) contracts can exhibit considerable complexity. Specifically, they are valuable not only due to their reliance on signals from entrepreneurs' performance but also because of messages directly transmitted by entrepreneurs; thus, optimal contracts necessitate communication between entrepreneurs and their banks. Conversely, in moral hazard settings where entrepreneurs lack private information from the past, the bank can no longer gain significantly from inducing their effort and actions.\" (Laffont \u0026amp; Rey 2003).\u003c/p\u003e \u003cp\u003eTo ensure the financial sustainability of group lending (maximizing outreach and achieving self-sufficiency), transaction costs must be minimized for both lenders and borrowers. The transaction costs of group lending programs vary according to the specific credit delivery mechanisms and the social environment. Transaction cost savings are more likely to be achieved in communities with high levels of social capital. In contrast, communities with low social capital may require higher initial administrative costs to foster trust and cohesion among group members, enabling lenders and borrowers to reduce transaction costs over the loan repayment period. However, these high upfront administrative costs in building group trust and cohesion often result in program failure. What actions can practitioners take to reduce transaction costs? First, for group formation, practitioners may collaborate with community-based organizations, including family planning programs, adult literacy networks, village associations, and agricultural markets, to identify and recruit potential members. Second, the lending program could initially focus on individuals with simple investment projects, as the certification processes preceding lending, business plan development, entrepreneurship training, and technical assistance do not necessitate substantial resources. Third, short-term working capital loans, combined with a lending incentive system, can contribute to a long-term reduction in per-loan transaction costs for the lender. This seems crucial to the financial sustainability of most Latin American Acción programs, where loan officers concentrate on cultivating long-term relationships with borrowers rather than transitioning them to traditional banks once they have established credit history (Bhatt \u0026amp; Tang, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e1998\u003c/span\u003e).\u003c/p\u003e \u003cp\u003ePeer pressure is often cited as a reason for the higher repayment rates in group lending programs relative to individual lending. According to the theoretical literature, group members can monitor each other's activities and sanction moral hazard, thus leading to higher repayment rates. Nevertheless, if borrowers are free to select their group, 'peer pressure' cannot compel a borrower who intentionally defaults on an individual loan to repay a group loan. This 'peer pressure' mechanism can enhance repayment rates if financial institutions can improve the efficacy of screening technologies (Sadoulet, \u003cspan citationid=\"CR40\" class=\"CitationRef\"\u003e1999\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab7\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 7\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 Themes of global experiences in group lending\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"6\" rowspan=\"7\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup lending experience in Ghana's Credit Unions\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eglobal experiences in group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup lending experience in the Philippines\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup lending: A suitable approach for SMEs\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003eSuccessful experiences in group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe role of group lending in social exclusion and health risks in Bangladesh\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGrameen and Acción International: Successful examples of Group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eImplementation of group lending programs in the United States and Canada\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eFailures of group lending programs\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e \u003cp\u003e\u003c/p\u003e \u003cp\u003eAfter the reported success of initiatives including the Acción International solidarity group program in Latin America and, most prominently, the Grameen Bank in Bangladesh, both of which extend unsecured credit to small groups of micro-entrepreneurs, consistently high loan repayment rates have been attained.\" (Bhatt \u0026amp; Tang \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2001\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eGroup lending is a methodology for small and medium-sized enterprises (SMEs) with high repayment rates. Theoretical and empirical studies demonstrate an enhancement of the credit market from the bank's standpoint through group lending, which attests to the informational benefits of group lending. In SMEs, group loans, instead of individual loans, can offer more favorable interest rates to borrowers. Under the voluntary group formation mechanism, SMEs choose to form groups with projects that share similar success probabilities, thereby reducing the information costs incurred by the bank in group evaluation and research. For such groups, group loans can offer more attractive interest rates than individual loans and lower the success thresholds for SME projects; consequently, this enhances the loan access opportunities for SMEs (Zhao \u0026amp; Gao, 2011).\u003c/p\u003e \u003cp\u003eA common query is why this form of group lending is not prevalent in developed countries but is primarily observed in developing countries. The answer can be attributed to differing information and contractual environments in developed and developing countries. Developed countries, with their superior asset titles and more robust legal systems, facilitate the use of collateral more readily. In contrast, in developing countries, even if a poor person owns some assets (like a small parcel of land), they often need more necessary institutions to serve as collateral. In addition, developed countries have institutions that foster improved information sharing among lenders (such as credit bureaus). These elements diminish the necessity for contractual arrangements like joint liability to mitigate credit market failures (Ghatak et al., \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2005\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003c/p\u003e \u003cp\u003e\u003c/p\u003e "},{"header":"Conclusion","content":"\u003cp\u003eThis paper conducts a comprehensive thematic analysis of 40 documents retrieved from a database through a meta-synthesis of secondary studies. The table below displays the second and third-level themes of group lending as identified in the analyzed articles:\u003c/p\u003e\u003cdiv class=\"gridtable\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003ctable float=\"Yes\" id=\"Tab8\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 8\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eLevel 1 and Level 2 themes of group lending\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLevel 1 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eLevel 2 code\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\" morerows=\"15\" rowspan=\"16\"\u003e \u003cp\u003eGroup lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePreference for individual lending over group lending\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"2\" rowspan=\"3\"\u003e \u003cp\u003eGroup lending versus individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e2\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePreference for group lending over individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e3\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eCombination of group and individual lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e4\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eIndividual liability\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eLiability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e5\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eJoint liability\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e6\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eGroup leader\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eCharacteristics of group formation\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e7\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNumber of group members\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e8\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSocial capital\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eCharacteristics of group formation\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e9\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eproject correlations\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e10\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe impact of group lending on asymmetric information\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"3\" rowspan=\"4\"\u003e \u003cp\u003eFinancial factors\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e11\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe impact of group lending on costs\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e12\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe impact of group lending on repayment (Non-default)\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e13\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eContractual structure of group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e14\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSuccessful experiences in group lending\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\" morerows=\"1\" rowspan=\"2\"\u003e \u003cp\u003eGlobal experiences in group lending\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e15\u003c/p\u003e \u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eFailures of group lending programs\u003c/p\u003e \u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/table\u003e\u003c/div\u003e\u003cp\u003eThe research presented in this paper indicates that while there is a substantial body of knowledge on the various facets of group lending, the most critical requirement is adapting this approach to local contexts. In essence, the implementation of group lending mechanisms should be customized to suit the specific environment, as numerous variables within this mechanism vary across different settings and exert both positive and negative influences on the results. Consequently, a primary void in this domain, is the need for domestic research on group lending grounded in data from its implementation within the country. Advances in this area can contribute to enhancing group lending mechanisms.\u003c/p\u003e"},{"header":"Declarations","content":"\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eAll authors reviewed the manuscript.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n \u003cli\u003eAbdul Karim, Zulkefly (2010). \u0026quot;Microfinance and Mechanism Design: The Role of Joint Liability and Cross-Reporting,\u0026quot; Munich Personal RePEc Archive (MPRA).\u003c/li\u003e\n \u003cli\u003eAdusei, M.; Appiah, Sarpong, (2011), \u0026quot; Determinants of Group Lending in the Credit Union Industry in Ghana,\u0026quot; Journal of African Business, Vol.12, No.2, pp: 238\u0026ndash;251.\u003c/li\u003e\n \u003cli\u003eAhlin, C., (2015). \u0026quot; The role of group size in group lending,\u0026quot; Journal of Development Economics, vol.115, pp:140\u0026ndash;155.\u003c/li\u003e\n \u003cli\u003eAllen, T., (2016). \u0026quot; Optimal (Partial) Group Liability in Microfinance Lending,\u0026quot; Journal of Development Economics, vol.121, pp: 201\u0026ndash;216, doi: 10.1016/j.jdeveco.2015.08.002.\u003c/li\u003e\n \u003cli\u003eBesley, T. and Coate, S. 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(2017). \u0026quot;Group Lending Model - A Panacea to Reduce Transaction Cost?\u0026quot; Zagreb International Review of Economics and Business, vol: 20, num: pp. 2, 49\u0026ndash;63.\u003c/li\u003e\n \u003cli\u003eVan Eijkel, Remco; Hermes, Niels; Lensink, Robert, (2011), \u0026quot; Group lending and the role of the group leader,\u0026quot; Small Bus Econ (Small et al.), vol.36, No.3, ppp:299\u0026ndash;321.\u003c/li\u003e\n \u003cli\u003eVan Tassel, Eric (1999). \u0026quot;Group Lending Under Asymmetric Information\u0026quot; Journal of Development Economics, Vol. 60, No 1, pp: 1-25.\u003c/li\u003e\n \u003cli\u003e\u003cspan id=\"_Toc63286137\"\u003eVarian, H. (1990). \u0026quot;Monitoring Agents with Other Agents\u0026quot; Journal of Institutional and Theoretical Economics, Vol.146, No. 1, pp: 153\u0026ndash;174.\u003c/span\u003e\u003c/li\u003e\n \u003cli\u003eWoolcock, M. 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Strategic Management Thought, No.2.\u003c/li\u003e\n\u003c/ol\u003e"},{"header":"Footnotes","content":"\u003col start=\"4\"\u003e\u003cli\u003e\u003cspan\u003e \u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://jstor.org\u003c/span\u003e\u003cspan address=\"https://jstor.org\" targettype=\"URL\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003e \u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://sciencedirect.com\u003c/span\u003e\u003cspan address=\"https://sciencedirect.com\" targettype=\"URL\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003e \u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://journals.sagepub.com\u003c/span\u003e\u003cspan address=\"https://journals.sagepub.com\" targettype=\"URL\" 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class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003e Citavi\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"loan, group lending, systematic review, thematic analysis, microfinance, joint liability","lastPublishedDoi":"10.21203/rs.3.rs-6123901/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6123901/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eGroup lending is a type of loan and deposit process management employed by financial institutions when interacting with groups of customers. This mechanism was first introduced by the Grameen Bank of Bangladesh in 1976 under the leadership of Muhammad Yunus. Subsequently, banks worldwide have adopted and modified this approach. This study employed a meta-synthesis of secondary studies in the conventional literature to identify 764 documents from various databases. After a rigorous screening process, 40 articles related to group lending were selected. Thematic analysis was used to analyze the data, identifying five main categories: group versus individual lending, liability, group formation characteristics, financial factors, and global experiences of group lending. The study concludes by emphasizing the need for more indigenous research on group lending, particularly research grounded in local implementation data.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eJEL Classification:\u003c/strong\u003e G21\u003c/p\u003e","manuscriptTitle":"A Systematic Review of Group Lending","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-04-03 04:18:14","doi":"10.21203/rs.3.rs-6123901/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"0ff347eb-248a-44c8-90a9-018c90516775","owner":[],"postedDate":"April 3rd, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2025-06-19T09:08:27+00:00","versionOfRecord":[],"versionCreatedAt":"2025-04-03 04:18:14","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-6123901","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-6123901","identity":"rs-6123901","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}