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a) (15 points) Discuss the advantage of group lending as opposed to individual lending. Explain why group lending achieves low default rate in...

a) (15 points) Discuss the advantage of group lending as opposed to individual lending. Explain why group lending achieves low default rate in average, while other formal credits do not. Be sure to mention incentive mechanism. (150 words)


(b) (15 points) The sequential lending strategy, which Grameen Bank adopted, is considered to have an advantage over the simultaneous lending strategy, in which all group members are given loans at the same time. Compare and contrast two strategies and explain the disadvantage of the simultaneous lending strategy. Be mindful of the group lending scheme which Grameen Bank adopts. (150 words)


(c) (15 points) The social involvements (16 decisions) make the Grameen bank very different from an ordinary financial institution. Briefly discuss the benefits of those social involvements in terms of economic development. You do not need to discuss all 16. Choose three (groups of) decisions and explain how each of the decisions (or groups of decisions) alters the situation and increases economic growth. Explicitly state the numbers of the decisions (e.g. (1), or (1) and (2)) at the beginning of each discussion. (100 words each)

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