Joint Liability Research Articles

Loan repayment behavior among the clients of Indian microfinance institutions: A household-level investigation

ABSTRACTThis study focuses on repayment risk associated with microfinance institution (MFI) lending in India. While identifying the determinants of loan delinquency, it divulges features that tend to create repayment differences between the low and high income client households. Primary data of 498 households collected from two Indian states are analyzed using descriptive statistics and logistic regression. The study examines the role of household characteristics, loan characteristics, moral hazard features, and the regional attributes in loan delinquency behavior. The findings ascertain that the households having low incomes, high indebtedness and greater loan diversion, and experiencing high costs of borrowing are prone to greater default probabilities. Contrarily, those having higher financial literacy with a feeling of social cohesiveness and joint liability are likely to be less delinquent. Absence of MFI supervision is a critical factor for loan delinquency. However, MFIs’ biases against poverty lending are possibly over-emphasized. With proper supervision and measures to check unproductive loan utilization, the repayment propensity is likely to improve.

Belgijski system wspólnej odpowiedzialności za wypłatę wynagrodzeń — łańcuch wzajemnych powiązań

Belgijski system wspólnej odpowiedzialności za wypłatę wynagrodzeń — łańcuch wzajemnych powiązań

PEMBERDAYAAN LEMBAGA KEUANGAN SYARIAH DALAM MENINGKATKAN PERAN INKLUSI KEUANGAN

With a large number of unbanked people in Indonesia, innovative access to Financial Inclusion is needed. Financial inclusion activities that aim to eliminate all forms of obstacles both in the way of prices and non-prices of public access to use or utilize financial services. Community Service - PKM, this time aims to increase the role of the financial services sector, especially to the owners, top management, and employees of several LKMS (Sharia Microfinance Institutions) - Sharia Rural Banks (BPRS), as executors or performers of financial activities inclusive which will have an impact on improving the welfare of the dhu'afa community, poverty alleviation and regional / regional economic development. This PKM is followed by the owner, top management, and employees of BPRS members as ASBISINDO - Indonesian Sharia Bank Association located in Greater Jakarta. The method used is to provide training through lectures, discussions, and questions and answers, then carried out focus group discussions and the distribution of questionnaires. The results show that the quality and speed of sharia banking services must continue to be improved, among others, by developing reliable and adaptive information technology. To accelerate the development of Islamic financial inclusion, it can be done by establishing a micro waqf bank or working together with Micro Sharia Financial Institutions (LKSM) such as Baitul Mal Wattamwil (BMT) or Islamic financial services cooperatives (KKJS), while maintaining prudential principles. BPRS is expected to continue to develop and monitor the implementation of Islamic financial inclusion through microfinance without collateral, qardhul hasan financing, or joint liability through group leaders or financing thaharah for low-income people.Keywords: Financial Inclusion, Unbanked - no bank account, LKMS - Islamic Microfinance Institution, Financial Services.

Psychological and Social Motivations in Microfinance Contracts: Theory and Evidence

Microfinance contracts have enormous economic and welfare significance. We study, theoretically and empirically, the problem of effort choice under individual liability (IL) and joint liability (JL) contracts when loan repayments are made either privately, or publicly in front of one’s social group. Our theoretical model identifies guilt from letting down the expectations of partners in a JL contract, and shame from falling short of normatively inadequate effort, under public repayment of loans, as the main psychological drivers of effort choice. Evidence from our lab-in-the-field experiment in Pakistan reveals large treatment effects and confirms the central roles of guilt and shame. Under private repayment, a JL contract increases effort by almost 100% relative to an IL contract. Under public repayment, effort levels are comparable under IL and JL contracts, which is consistent with recent empirical results. This indicates that shame-aversion plays a more important role as compared to guilt-aversion. Under IL, repayment in public relative to private repayment increases effort by 60%, confirming our shame-aversion hypothesis. Under JL, a comparison of private and public repayment shows that shame trumps guilt in explaining effort choices of borrowers.

Fundamentals of VAT grouping in the Netherlands

VAT grouping is a complex concept in European VAT law. Due to the optional nature of Article 11 VAT Directive and the judgment of the CJEU in the Larentia + Minerva case that Member States must develop and maintain their own specifications of the so-called link criteria, no strong harmonisation between national VAT grouping regimes is to be expected in the near future. It is beyond doubt that VAT grouping pervades the practice of many Member States, and as such can play a significant role in international business decisions. It is up to VAT practitioners in each Member State to provide their foreign colleagues with the legal particulars of their national VAT grouping regime. In this contribution, the authors take up this challenge by giving a brief overview of the fundamentals of the VAT grouping regime in the Netherlands. The contribution contains a sketch of the history of the Dutch grouping regime and a short examination of the criteria for forming a Dutch VAT group. It also touches on the consequences of being a VAT group for the application of VAT law to the parties concerned, as well as on matters of administrative obligation and joint liability. More in-depth attention is given to the Dutch interpretation of the criteria of close financial, organizational and economic links. Finally, the authors examine on an even deeper level a contemporary discussion in Dutch VAT doctrine as regards the criterion of close economic links, spurred on by recent case law of the Dutch Supreme Court

ФЕНОМЕН "ЦИВІЛЬНОГО ЗАРУЧНИЦТВА" В ДЕПОРТАЦІЙНИХ ПРАКТИКАХ РАДЯНСЬКИХ СПЕЦСЛУЖБ НА ЗАХІДНІЙ УКРАЇНІ В 1944–1952 РОКАХ

In 1944, with the beginning of the re-occupation of Western Ukraine by the Soviet Union, the practice of using forced evictions of local civilians as a method of repression and combating against anti-Soviet organizations and movements was restored. In fact, the deportation campaign against the “OUN families” was continued, which began on May 22, 1941 and lasted, with a break for the German occupation, until 1952. The deportation campaign included four stages: (1) operation on May 22, 1941, when 3 079 families or 11 329 persons were evicted; (2) campaigns of 1944–1946 – 14 726 families or 36 609 persons; (3) operation “Zapad” (“West”) on October 21–26, 1947 – 26,332 families or 77,791 persons; and (4) 1948–1952 campaigns – 22,308 families or 80,209 persons. In total, 205,938 people were deported from Western Ukraine as part of this campaign. Counterinsurgency against the Ukrainian anti-Soviet Resistance movement (primarily the OUN and the UPA) was the main purpose of these measures of the Soviet special services. Initially, the use of mass deportations was aimed at destroying the base of the Ukrainian anti-Soviet resistance movement and focused primarily on the families of the killed, arrested and active members of the underground. With the resumption of the deportation campaign in 1944, the application of the principle of hostility began to become dominant. Initially as a “family hostage” (since August 1944), and soon as civilian hostage – when the principle of collective responsibility of the local civilian population start used. The first detected order of the Soviet special services, which provided the application of the principle of civil hostage, was issued on May 24, 1945 jointly by the NKVD and the NKGB of the Ukrainian SSR. Despite the absence of any direct reference to the principle of hostage in the regulatory acts of operation "Zapad", civilians and members of the anti-Soviet resistance movement perceived it as a “response” to the activity of Ukrainian insurgents. On October 20, 1948, the USSR Order No.00386 was issued, which was based directly on the principles of civil hostage. For more effective implementation of the Chekist “retaliatory actions” a special logistic infrastructure of special assembly points was created. Based on this analysis, it was established that the Stalinist repression system used the principles of joint and several liabilities for the local civilian population of Western Ukraine in 1944–1952. It can be qualified as a violation of the rules of international conventions by the Soviet special services that prohibit the practice of hostage among civilian persons who are not involved in armed conflicts.

Group lending, matching patterns, and the mystery of microcredit: Evidence from Thailand

How has the microcredit movement managed to push financial frontiers? Theory shows that if borrowers vary in unobservable risk, then group‐based, joint liability contracts price for risk more accurately than individual contracts, provided that borrowers match with others of similar project riskiness (Ghatak (1999, 2000)). This more accurate risk‐pricing can attract safer borrowers and rouse an otherwise dormant credit market. We extend the theory to include correlated risk, and show that borrowers will match with partners exposed to similar shocks to lower their chances of facing liability for their partners. We use unique data on Thai microcredit borrowing groups to test for homogeneous matching by project riskiness and type of risk exposure. Evidence supports the theory, in that groups are more homogeneous in riskiness but less diversified in type of risk exposure than they would be under random matching. The results suggest that group lending is improving risk‐pricing by embedding a discount for safe borrowers, and can thus explain part of the unprecedented rise in financial intermediation among the world's poor; but that a potential pitfall of voluntary group formation is antidiversification, which points to strategies for lender intervention.

Impact of Microfinance on Enterpreneurship Development: A Case Study of JLGS Lucknow, Uttar Pradesh, India

This research study investigates the impact of microfinance schemes on entrepreneurial development in lucknow district. To achieve the stated objective of the study, three research questions were formulated. The descriptive research design was adopted for the study. The Population for our study encompasses the joint liability groups who have been engaged in microfinance activities and are the beneficiaries of microfinance credit.250 JLGs respondents were selected from lucknow District according to simple random sampling method The researcher used questionnaire as an instrument of primary data collection. Tables and simple percentages were used in data presentation. For clear analysis, the study centres on two broad variables; the dependent variable which is entrepreneurial development and the independent variable which is microfinance institutions. The study reveals that i there is a significant difference in the number of entrepreneurs who used microfinance institutions and those who do not use them; ii there is a significant effect of microfinance institutions activities in predicting entrepreneurial productivity; and iii that there is no significant effect of microfinance institutions activities in predicting entrepreneurial development. The researcher concludes that microfinance institutions world over and especially are identified to be one of the key players in the financial industry that have positively affected individuals, business organizations, other financial institutions, the government and the economy at large through the services they offer and the functions they perform in the economy.

Bogus joint liability groups in microfinance

In a random sample of clients of CFPAM, the largest microlender in China, 73% of all joint-liability groups practice Lei Da Hu. That is, one person uses all group members’ loans in a single project. We call such borrower groups ‘bogus groups’. The Lei Da Hu practice violates a key premise of group lending, that each borrower must use their loan in a separate project (what we call ‘standard group’). We extend the theory of group lending by analyzing the endogenous formation and coexistence of standard and bogus groups and characterize the efficient lending terms. The chosen group form depends on the borrower productivities and probability of success. Bogus groups are formed by heterogeneous borrowers, when the gains from larger expected output exceed the foregone default risk diversification. Accounting for bogus groups in their lending strategy can help MFIs raise productive efficiency and borrower welfare.

O Tema 793 do STF e o direcionamento do cumprimento das prestações na área de saúde conforme as regras de repartição de competências estabelecidas no SUS

Objetivo: analisar o Tema 793 do STF, que trata da responsabilidade solidária dos entes federados pelo dever de prestar assistência à saúde, e que exigiu do magistrado que direcione o cumprimento da obrigação conforme as regras de repartição de competências. Metodologia: o trabalho utilizou o método dedutivo para compreender os diversos aspectos insertos no voto do relator Ministro Edson Fachin sobre o tema da repartição de competência no SUS, que culminou com a Tese 793 do STF. Resultados: o artigo apresenta as regras básicas de financiamento da assistência farmacêutica; fornece parâmetros para identificar o ente responsável pela prestação da saúde; indica formas de diminuir os custos da judicialização e aponta a União Federal como a maior responsável pelo financiamento da assistência farmacêutica. Conclusão: o Tema 793 não conseguiu ainda trazer uma unicidade das decisões judiciais, e não é claro sobre qual ente federado deva compor o polo passivo e ser condenado nas prestações da saúde. A identificação do devedor da prestação deve ser uma preocupação dos litigantes e dos operadores do direito, inclusive para assunção das eventuais penalidades por descumprimento.

MICROFINANCE; A POVERTY REDUCTION TOOL, SOCIO-ECONOMIC PROSPECTIVE

This paper aims to critically evaluate the microfinance approach in social and economic perspective. Critical analysis reveals that microfinance can be used as an efficient tool to reduce poverty, thus contributing towards economic as well as social development. Moreover, paper highlights the role of institutional design and indicates that microfinance institutions working on the lines of non government organizations and following the double bottom line approach performs better than the other institutional frameworks. Joint liability and the role of group leader are eminent in enhancing the performance of these institutions. Poverty can be decreased if microfinance institutions are driven in a more systematic manner keeping in mind primarily the well being of society.

Aiding and Abetting Matters

Abstract Aiding and abetting is a popular and well-known basis of criminal liability. Yet its civil counterpart, civil aiding and abetting, exists in relative obscurity. Like criminal aiding and abetting, civil aiding and abetting is of ancient origin, but it has only achieved contemporary popularity in particular niche areas like business torts and human rights statutes. In some states, it currently exists in a strange legal limbo, with perhaps some specific forms of civil aiding and abetting recognized (like aiding and abetting fraud), but with its status as a general fount of tort liability uncertain. This Article argues that the disregard for civil aiding and abetting is an error, as civil aiding and abetting can play an important role in remedying contemporary harms. Specifically, civil aiding and abetting can bridge gaps left by duty rules in negligence. This gap-filling function will be further enhanced if courts continue the nascent trend of accepting that in certain circumstances, a failure to act can be a form of substantial assistance. As our cultural understandings of complicity broaden, aiding and abetting can serve as an important tool for allocating responsibility and achieving just compensation. Although it is often mistakenly eclipsed by other forms of joint liability, civil aiding and abetting has significant independent value.

Gender differences in the repayment of microcredit: The mediating role of trustworthiness

Growing evidence suggests that women are more likely to repay collateral-free microloans than men. However, we know little about what explains such gender differences. We hypothesize that better repayment performance of women microcredit borrowers can largely be explained by gender differences in innate trustworthiness. We conduct a trust game and a microloan repayment game in rural Bangladesh. We find that women are more trustworthy than men and that they are more likely to repay their loans irrespective of any control mechanisms, such as joint liability or dynamic repayment incentives. The results of a mediation test suggest that the gender effect on loan repayment is significantly mediated by differences in innate trustworthiness. We conduct a sensitivity test to check the extent to which unobserved confounders might have influenced the mediation effect, and find no evidence of significant omitted variables bias.

Impact of Microcredit on Women Empowerment Indicators: An empirical reserach in the state of Uttarakhand

Women Empowerment has been on national agenda of every government. In developing nation women comprises fifty percent of the population so empowering them is crucial for development and nation building. Various Microfinance Institutions (MFIs) extends microcredit/loan via group model (Self Help Groups and Joint Liability Groups) to the marginalised segment particularly women groups and minorities primarily residing in rural areas with an aim to empower them and foster their socio-economic development. Previous studies have shown that microcredit has positive impact, but providing credit alone does not guarantee empowerment of the member beneficiaries. From past studies it can be concluded that empowerment demand an integrated approach from all the participating bodies/institutions involved, only then can be the objective of socio-economic development be accomplished. Since today very limited literature is available on microcredit and its impact. The current research examines the impact of microcredit on women empowerment indicators (decision making, awareness and psychological factors) of member beneficiaries in Haridwar district of Uttarakand. Women are organized into groups (Joint Liability Groups) and provided microcredit /loan. Non Probability sampling (Convenience Sampling) technique is adopted in sample selection where access to microcredit serves as independent variable and women empowerment indicators serves as dependent variables. The study consists of sample size of 362 member beneficiaries. Hypothesis testing is applied to find the significant association between the dependent and independent variables. Inferential statistics i.e Chi sq test is used to find the association/relationship between access to microcredit and empowerment indicators. Results indicate that there is no association between access to microcredit and women empowerment indicators. The results indicate that microcredit vial JLGs makes no impact on the empowerment indicators, making no improvement in the lives of its beneficiaries. There is need of regular and continuous impact assessment by credit institutions, participation from states and local bodies, must be analysis of socio-cultural factors and formation of women self administered system are some of the recommendations of the study. The results can be used by various stakeholders in designing better approach and as it provides them information on the areas which needs improvement so that microcredit can bring positive difference in the lives of beneficiaries. Also, it opens doors for further research in order to explore the socio-cultural factors which influence women empowerment.

A saúde no STF: o ressarcimento interfederativo à luz do Recurso Extraordinário nº 855.178

Objetivo: fazer uma análise crítica sobre a tese da responsabilidade solidária pelo fornecimento de medicamentos, fixada pelo Supremo Tribunal Federal com repercussão geral, no Recurso Extraordinário nº 855.178/SE, ao interpretar a competência administrativa comum da União, Estados e Municípios prevista na Constituição Federal relativamente à saúde, de maneira a chamar atenção para a necessidade de se regulamentar os mecanismos de ressarcimento intergovernamental, com vistas a restabelecer o equilíbrio no pacto federativo. Metodologia: pesquisa teórica e documental sobre o ressarcimento interfederativo de ações e prestações de saúde, tendo como norte o caso que ensejou na fixação da tese. A revisão documental foi o procedimento técnico adotado para fazer a observação indireta do objeto pesquisado, por meio de documentos oficiais, adotando-se como fonte secundária a proposição de Súmula Vinculante nº 4 e o Projeto de Lei nº 4.869/2016, disponíveis em sítios oficiais do governo brasileiro. Resultados: a sistemática fixada pelo SupremoTribunal Federal privilegia o acesso à justiça, de maneira a tornar mais célere a concessão judicial de medicamentos e, em razão disso, tende a fomentar a judicialização da saúde. Conclusões: vislumbra-se o descumprimento da segunda parte da tese, referente ao ressarcimento interferativo, haja vista a complexidade e fragilidade da sistemática atual de reembolso intergovernamental.

Problems Faced by Microcredit Borrowers in Joint Liability Groups (JLGS): Empirical Evidence of NBFC-MFIS in Uttarakhand

Microcredit is proved to be an effective tool for socio-economic development of its borrowers. In the past various models took shape in developing nations and made credit/loan available at the doorstep of the borrowers. The framework for delivering credit is called credit delivery model. Joint Liability Groups (JLGs) were widely adopted by various microfinance institutions in providing credit to the borrower groups. Many studies talked about the success of JLGs but very little literature was available on the problems faced by borrowers in JLGs. Data collected from Haridwar district is used to study the problems faced by borrowers in JLGs. Relation between Group association and problems faced by borrowers was also studied. The findings show that the major problems which borrowers faced include-strict repayment schedule, Non repayment/late repayment of loan, lack of loan information, peer pressure among group members etc. There also exist a relationship between group association and problems faced by borrowers.

Take-up of joint and individual liability loans: An analysis with laboratory experiment

This paper reports a study on decision-making by borrowers regarding take-up of different loan types in a laboratory microfinance experiment. I show that when prospective borrowers are offered a flexible choice of different loan types (here, individual liability (IL) and joint liability (JL)), take-up increases. This is due to heterogeneous borrowers self-selecting into different loan types. Results suggest that more risk averse borrowers are less willing to take up IL loan and less selfish borrowers show signs of higher inclination to take up JL loan. The results collectively imply that microloan offers need to be customized according to the heterogeneous preferences of borrowers; also, there needs to be enough flexibility in the offered choice-set for better self-selection. This would result in a substantial increase in the take-up rate of microloans by the borrowers.

A panacea for competition law damages actions in the EU? A comparative view of the implementation of the EU Antitrust Damages Directive in sixteen Member States

This article makes an original contribution to the literature on the developing area of private enforcement of EU competition law. It delivers a significant, rigorous and comprehensive analysis of the transposition across a broad selection of Member States (MS) of a major EU Directive introduced with the aim of harmonizing and facilitating competition law damages actions across the EU. It looks at the implementation of the Directive 2014/104/EU in sixteen MS. It analyses the solutions followed by each of those MS in addressing the various issues raised by the Directive (liability and compensation, joint liability, statute of limitations, quantification of harm, passing-on defence and indirect purchasers claims, access to evidence and collective redress).

Take-Up of Joint and Individual Liability Loans: An Analysis With Laboratory Experiment

This paper reports a study on decision-making by borrowers regarding take-up of different loan types in a laboratory microfinance experiment. I show that when prospective borrowers are offered a flexible choice of different loan types (here, individual liability (IL) and joint liability (JL)), take-up increases. This is due to heterogeneous borrowers self-selecting into different loan types. Results suggest that more risk averse borrowers are less willing to take up IL loan and less selfish borrowers show signs of higher inclination to take up JL loan. The results collectively imply that microloan offers need to be customized according to the heterogeneous preferences of borrowers; also, there needs to be enough flexibility in the offered choice-set for better self-selection. This would result in a substantial increase in the take-up rate of microloans by the borrowers.

Dynamics of Group Lending Mechanism and the Role of Group Leaders in Developing Countries

Group lending mechanisms have increasingly become popular among microfinance providers in recent years. This is largely due to its ability to leverage joint liability to increase loan repayments whilst promoting an entrepreneurial spirit among borrowers. Meanwhile, a group-lending mechanism is also very important in promoting women's empowerment through cooperative engagements of all group members. However, the effectiveness of the group lending methodology in the delivery of microfinance within a developing country context is largely under-researched. Using data from extensive focus groups interviews of women borrowers held in Nigeria among participants from 150 different groups, this article analyses the dynamics of group lending mechanism (group formation, peer monitoring, pressure and support). The article widens the current narrow literature on group leaders by providing a detailed empirical account of the activities of group leaders in a microfinance intervention. The findings showed that because group leaders are primarily held liable for loan delinquency of group members, they are more highly motivated than other members to monitor and pressure members. The results also suggest that while group leaders were found to perform vital roles, some of these group leaders abused their positions in ways that undermine group cohesion and microfinance sustainability. Lastly, the article introduces the “multiple card phenomenon” in group-based microfinance intervention.