A study of group lending and incentives in Bolivia

Documents a case study of an urban group lending programme run by the bank BancoSol in La Paz, Bolivia. The lending programme has proved capable of sustaining a set of widely accessible lending relations with a large number of self‐employed microentrepreneurs in Bolivia. In documenting this programme, our aim is to contrast several features of BancoSol’s group lending policies against some of the theoretical results that have emerged from the microeconomic modelling research on group loan contracts. This exercise is based in part on a small survey that was conducted among BancoSol’s client borrowers.