Is Group Lending A Good Enforcement Scheme for Achieving High Repayment Rates?: Evidence from Field Experiments in Vietnam

Microfinance institutions employ various kinds of incentive schemes but estimating the effect of each scheme is not easy due to endogeneity bias. We conducted field experiments in Vietnam to capture the role of joint liability, monitoring, cross-reporting, social sanctions, communication and group formation in borrowers’ repayment behavior. We find that joint liability contracts cause serious free-riding problems, inducing strategic default and lowering repayment rates. When group members observe each others’ investment returns, participants are more likely to choose strategic default. Even after introducing a cross-reporting system and/or penalties among borrowers, the default rates and the ratios of participants who chose strategic default under joint liability are still higher than those under individual lending. We also find that joint liability lending often failed to induce mutual insurance among borrowers. Those who had been helped or who had repaid a little in the previous round were more likely to default strategically and repay a little again in the current round and those who paid large amounts were always the same individuals.

Development strategy in Bihar through revitalizing the agricultural sector : a preliminary analysis

Based mainly on secondary data and partly on primary information obtained through field surveys in selected rural areas in Bihar in 2011, this paper firstly argues the critical importance of agricultural growth for overall economic development, and then reviews the sluggish growth of agriculture in Bihar in the past and examines the major reasons for this. The long-term negligence of agricultural research (especially development and diffusion endeavors for improved rice varieties suitable to the local conditions of Bihar) by the state government and some sort of ‘backwardness’ in tube-well irrigation technology can be pointed out as important constraints. There is, in particular, the ‘paradox’ in Bihar agriculture of why rice and wheat yields have remained so low in spite of the relatively well-developed irrigation by tube-wells. Finally, by showing the process of a rapid increase in autumn and winter rice yields during the 1990s in West Bengal, it is suggested that Bihar farmers and policy-makers should learn from the experience of West Bengal in order to get some hints for the development of the rice sector in Bihar.

Regional differences regarding land tenancy in rural Rwanda, with special reference to sharecropping in a coffee production area

This paper examines land tenancy systems and tenant contracts in Rwanda, with respect to socioeconomic contexts. Our research in southern and eastern Rwanda produced data suggesting that land borrowing with fixed rents has been generally practiced, and that rent levels have been low in comparison to expected revenues from field production. In the western areas of coffee production, however, the practice of sharecropping has recently appeared. This system is advantageous to landowners, as they are able to acquire half of the harvests; in addition, the fixed rent levels in this region are much higher than those of other regions. In the southern and eastern regions, because land borrowing with fixed rents has been the only tenancy pattern and rent levels have remained low, the economic situation should be interpreted in the context of a continuing traditional Rwandan land tenure system. In contrast, in the western coffee production area, the soaring of fixed rents and the emergence of sharecropping have been brought about by high pressures for land use, which were caused not only by a population increase but also by the development of cash crop production and the existence of a labor exchange system. The increase in rent levels has therefore been offset by a corresponding increase in agricultural productivity.

The development of private farms in Vietnam

The objective of this paper is to explore the entities that have developed private farms (trang trai) in Vietnam. Various types of private farms have emerged in the last ten years. It is noteworthy that the owners of private farms are not necessarily agricultural households but also include government officials and the urban rich. Based on data collected from the author’s field surveys in Vietnam from 2006 to 2011, the paper attempts to categorize patterns in the development of private farms and analyze their differences. The paper argues that private farms developed by agricultural households are still limited because of the difficulty of consolidating land.