Analysis of group credit efficiency in MFIs in the DRC

A group loan is a credit contract between a financial institution and a group of individuals, enabling credit to be granted to micro-businesses lacking material collateral. The Democratic Republic of Congo, like other developing countries, has seen an increase in the number of microfinance institutions in recent years. Some of these institutions offer only group credit, others only individual credit, and still others offer both types of credit simultaneously. In some MFIs, group credit performs less well than individual credit; some are currently abandoning group credit in favor of individual credit, and in others the share of group credit in the portfolio is lower than that of individual credit. This situation even leads us to question the effectiveness of this methodology, which has proved so successful at Grameen Bank and Bancosol in Bangladesh, as well as in other countries.