ckhung at indiana.edu
12-30-1994, 04:10 PM
I am new to the list, but would like to share something about peer
lending that was brought up in the latest postings. I am a Ph.D. student
at Indiana University, Bloomington, IN. I am working on my dissertation
research which focuses on peer lending programs in the US. One of the
key features of these programs is the joint liability rule that Paul
mentioned regarding the Grameen Bank and the program he is familiar with
in Thailand. The joint liability rule comes in at least two versions and
I am also interested in the nature of the rule used in the programs in
Thailand. One version of the rule used in the Grameen Bank in Bangladesh
requires that all the loans made to individual borrowers in a loan group
of 4 to 10 members must not be delinquent or in default before any new
loan is made to anyone in the same group. These loan groups are mostly
self-selected by the members themselves. The same rule is used by other
programs in Latin America, for instance, those coordinated by ACCION
International. Another version of the joint liability rule comes in the
form of a joint emergency fund (or under other names) raised by the
members of a loan group. This version is used in the village banking
model of FINCA, which has been active in Latin America as well. Loan
groups in the village banking model are typically much larger than those
in the Grameen model. Under this second version of the rule, any
delinquent or defaulted loan is covered by the joint emergency fund, and
additional loans may be extended to other borrowers of good standing in
the same group. Both versions of the rule are intended to create
incentives for members of the same group to screen and monitor each
other's loan, and thus enhance loan repayment. So far, the peer lending
program in developing countries seem to be quite successful in achieving
a remarkable repayment rate of 98% or higher.
Most peer lending programs in the US borrowed their ideas from
these programs in the US. Some of the US pioneer programs started less
than 10 years ago. In the last 5 years or less, the second generation of
peer lending programs sprang up in different parts of the US. ACCION
International and FINCA are also very active in the last two years or so
in transplanting their models to various cities in the US.
There have been evaluation reports on some of the larger peer
lending programs in the US. One such report is done by the Aspen
Institute in Washington DC. The Aspen report is a three year
longitudinal project on about 5 microenterprise-assistance programs,
three of which use the peer lending model. My understanding is that the
final report will be available sometime in the Spring of 1995. There are
interim reports available for purchase too. Other than the Aspen
project, which is called Self Employment Learning Project, there are
evaluation reports commissioned by the larger programs. Another source
of information is the Calmeadow Foundation in Toronto, which sponsors 4
peer lending programs in Canada. There is also a report on a conference
of US and Bangladesh practioners of peer lending held in 1993, which
covers the issues of adapting the Grameen model to the North America
setting. This report is available from both the Aspen Institute and the
Calmeadow Foundation. The general observtion of the conference is that
the results of transplanting the model to the US setting have been
mixed.
One goal of my dissertation is to sort out this mixed results.
My dissertation focuses on two related research questions.
(1) What is the configuration of rules used in various peer lending
programs in the US to deal with the diverse contexts they are in?
(2) What is the extent and pattern of screening, monitoring, and
enforcement activities undertaken by the staff and participants of these
programs?
My primary source of programs has been the 1994 Directory of US
Microenterprise Programs, which is published by the Aspen Institute.
There are about 40 to 50 of the microenterprise programs listed in the
directory that provide peer lending. I am planning to do a survey of
these programs with in-depth observation of a few of them as the primary
data for my dissertation. Depending on my funding situation, I hope to
start data collection within the next 6 months. So, if any subscriber on
this discussion list is on that directory and has a peer lending program,
I'll contact you in a few months about the survey. If any subscriber has
a peer lending program but is not listed in the directory, or not
accurately identified in the directory as having such program, I would
very much like to be able to contact you if you send me your address and
phone number. I am hoping to finish the dissertation in a year and a
half, and would like to share the findings with practioners on this
network or through some other means.
Thank you for your patience in reading this long mail.
Richard Hung, Ph.D Candidate
School of Public and Environmental Affairs
Indiana University
513 North Park Ave.
Bloomington, IN 47408
812-855-0441
812-855-3150 (FAX)
Email: CKHUNG@INDIANA.EDU
This post transferred from the cdb-l mailing list
lending that was brought up in the latest postings. I am a Ph.D. student
at Indiana University, Bloomington, IN. I am working on my dissertation
research which focuses on peer lending programs in the US. One of the
key features of these programs is the joint liability rule that Paul
mentioned regarding the Grameen Bank and the program he is familiar with
in Thailand. The joint liability rule comes in at least two versions and
I am also interested in the nature of the rule used in the programs in
Thailand. One version of the rule used in the Grameen Bank in Bangladesh
requires that all the loans made to individual borrowers in a loan group
of 4 to 10 members must not be delinquent or in default before any new
loan is made to anyone in the same group. These loan groups are mostly
self-selected by the members themselves. The same rule is used by other
programs in Latin America, for instance, those coordinated by ACCION
International. Another version of the joint liability rule comes in the
form of a joint emergency fund (or under other names) raised by the
members of a loan group. This version is used in the village banking
model of FINCA, which has been active in Latin America as well. Loan
groups in the village banking model are typically much larger than those
in the Grameen model. Under this second version of the rule, any
delinquent or defaulted loan is covered by the joint emergency fund, and
additional loans may be extended to other borrowers of good standing in
the same group. Both versions of the rule are intended to create
incentives for members of the same group to screen and monitor each
other's loan, and thus enhance loan repayment. So far, the peer lending
program in developing countries seem to be quite successful in achieving
a remarkable repayment rate of 98% or higher.
Most peer lending programs in the US borrowed their ideas from
these programs in the US. Some of the US pioneer programs started less
than 10 years ago. In the last 5 years or less, the second generation of
peer lending programs sprang up in different parts of the US. ACCION
International and FINCA are also very active in the last two years or so
in transplanting their models to various cities in the US.
There have been evaluation reports on some of the larger peer
lending programs in the US. One such report is done by the Aspen
Institute in Washington DC. The Aspen report is a three year
longitudinal project on about 5 microenterprise-assistance programs,
three of which use the peer lending model. My understanding is that the
final report will be available sometime in the Spring of 1995. There are
interim reports available for purchase too. Other than the Aspen
project, which is called Self Employment Learning Project, there are
evaluation reports commissioned by the larger programs. Another source
of information is the Calmeadow Foundation in Toronto, which sponsors 4
peer lending programs in Canada. There is also a report on a conference
of US and Bangladesh practioners of peer lending held in 1993, which
covers the issues of adapting the Grameen model to the North America
setting. This report is available from both the Aspen Institute and the
Calmeadow Foundation. The general observtion of the conference is that
the results of transplanting the model to the US setting have been
mixed.
One goal of my dissertation is to sort out this mixed results.
My dissertation focuses on two related research questions.
(1) What is the configuration of rules used in various peer lending
programs in the US to deal with the diverse contexts they are in?
(2) What is the extent and pattern of screening, monitoring, and
enforcement activities undertaken by the staff and participants of these
programs?
My primary source of programs has been the 1994 Directory of US
Microenterprise Programs, which is published by the Aspen Institute.
There are about 40 to 50 of the microenterprise programs listed in the
directory that provide peer lending. I am planning to do a survey of
these programs with in-depth observation of a few of them as the primary
data for my dissertation. Depending on my funding situation, I hope to
start data collection within the next 6 months. So, if any subscriber on
this discussion list is on that directory and has a peer lending program,
I'll contact you in a few months about the survey. If any subscriber has
a peer lending program but is not listed in the directory, or not
accurately identified in the directory as having such program, I would
very much like to be able to contact you if you send me your address and
phone number. I am hoping to finish the dissertation in a year and a
half, and would like to share the findings with practioners on this
network or through some other means.
Thank you for your patience in reading this long mail.
Richard Hung, Ph.D Candidate
School of Public and Environmental Affairs
Indiana University
513 North Park Ave.
Bloomington, IN 47408
812-855-0441
812-855-3150 (FAX)
Email: CKHUNG@INDIANA.EDU
This post transferred from the cdb-l mailing list