ABSTRACT
By all accounts, group lending was born in the field, not in the economics laboratory. Innovator and Nobel laureate Muhammad Yunus credits his discovery of this lending method to a hands-on, inductive approach to helping the poor. Although some have argued that Yunus’s Vanderbilt economics PhD played a role, group lending certainly pre-dates the economic analysis of it. The Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand, for example, has used group lending since its origins in the late 1960s. 1 Economic analysis of group lending seems to have originated around 1990; an early example is Stiglitz (1990).
