Briefly explain the merits of the given statement

Reference no: EM131916043

Problem

1. Several theoretical approaches support group lending as a way to achieve better outcomes for both microfinance borrowers and banks. Even though, both empirical and experimental approaches have found mixed evidence on this issue, and a number of banks have been lately moving towards individual lending. Which may be the aspects that explain these different perspectives of group lending benefits?

2. "If borrowers cannot monitor each other any better than the bank can, joint liability cannot solve the problems of moral hazard." Briefly explain the merits of this statement.

Reference no: EM131916043

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