An application of Mean–Covariance Structure Models for the analysis of group lending behavior

Understanding the influence of group dynamics (such as group homogeneity and the domino effect) on loan repayment is key to strengthening microfinance institutions in developing countries that employ the group lending methodology. Empirically, these conceptual variables have no perfect proxies and a...

Full description

Saved in:
Bibliographic Details
Published in:Journal of policy modeling 2003-12, Vol.25 (9), p.863-868
Main Authors: Paxton, Julia, Thraen, Cameron
Format: Article
Language:English
Subjects:
Banking industry
Developing countries
Group lending
Latent variables
LDCs
Loans
Mathematical models
Mean and covariance structure models
Repayments
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Understanding the influence of group dynamics (such as group homogeneity and the domino effect) on loan repayment is key to strengthening microfinance institutions in developing countries that employ the group lending methodology. Empirically, these conceptual variables have no perfect proxies and are suited for latent variable models. Mean and Covariance Structure Models (MECOSA) are a useful methodology for the incorporation of latent variables with metric, censored metric, dichotomous and ordinal indicators. Data from 140 groups from a group lending program in Burkina Faso were used to demonstrate the application and interpretation of MECOSA.
ISSN:0161-8938
1873-8060
DOI:10.1016/j.jpolmod.2003.10.002