The Analysis Of Repayment Rate Of Group Lending

As a unique and innovative credit model, the high repayment rate of group lending hascaused a great concern from the global academic community. Developed and developingcountries are actively drawing on this credit to deal with the difficult problem which poorpeople can hardly borrow from the bank. However, not everyone in the study of group lendingfrom Bengal will succeed. In some regions and countries, group lending even failed. Thereason why the repayment rate is low in these regions and countries is that they don’t studythe factors of the success of group lending. Therefore, it is necessary for the various elementsof the group lending repayment rate system in-depth study, to explore a significantly behindthe factors affecting the repayment.Based on the two games that between construction and group members and among themembers of the same group, through compare with traditional farmers credit, the technologyof micro-credit and agricultural land mortgage, the unique factors are found, includingeconomic rationality, the size of the group, the conduction effect of the network in the group,credit history (including personal and the entire local conditions) and where they are residingor habitual residence. Then these factors are analyzed by game model. Farmers who joined ingroup lending in Fufeng, Yanliang and Yangling were researched. Based on these data,logistic regression model is used to make an empirical analysis. Finally, the paper concludedthat the loan’s principal and interest, annual household net income, loan purpose, theinformation transmission effect of the group, regional credit status is significantly related togroup lending. The head of household age, head of household education level, total householdassets, household location, group size has no significant effect. On the basis of the abovestudies, to further ensure high repayment rate of group lending, the paper proposes to enhancethe concept of farmers credit, enhance the credibility factor, strengthen the association offarmers and put the unique factors in the appraisal system. Only in this way, can we ensure thesuccess of the group lending and thus achieve the ultimate goal to solve the problem oflow-income farmers loans.This article will first explore the game to analyze the introduction of group lending, the basic premise-economic rationality. The farmers in the different cases will show a differentrationality, the rationality of small farmer’s economic rationality and moral of small farmersto survive rational. For the first time compare group lending with other loans form to identifythe unique influence factors of group lending and put affecting factors in the game model.Finally, the general influence factors and the unique impact factors are substituted into theLogistic model, an empirical test to get a better evaluation system of evaluation of grouplending borrowers. Further improve the group lending credit rating system, to a certain extent,improve the overall economic benefits of society.