caa a22 4500 445877405 CHVBK 20180317145532.0 cr unu---uuuuu 170323e20110401xx s 000 0 eng 10.1007/s11187-009-9223-5 doi (NATIONALLICENCE)springer-10.1007/s11187-009-9223-5 Group lending and the role of the group leader [Elektronische Daten] [Remco van Eijkel, Niels Hermes, Robert Lensink] This paper investigates strategic monitoring behavior within group lending. We show that monitoring efforts of group members differ in equilibrium due to the asymmetry between members in terms of future profits. In particular, we show that the entrepreneur with the highest future profits also puts in the highest monitoring effort. Moreover, monitoring efforts differ between group members due to free-riding: one member reduces her level of monitoring if the other increases her monitoring effort. This effect is also at play when we introduce a group leader into the model. The individual who becomes the group leader supplies more monitoring effort than in the benchmark case. We empirically test the model using data from a survey of microfinance in Eritrea and show that the group leader attaches more weight to future periods than nonleaders in the group, which may explain why a large part of total monitoring is done by the leader. The Author(s), 2009 Group lending nationallicence Group leader nationallicence Moral hazard nationallicence Monitoring nationallicence van Eijkel Remco University of Groningen, Groningen, The Netherlands aut Hermes Niels University of Groningen, Groningen, The Netherlands aut Lensink Robert University of Groningen, Groningen, The Netherlands aut Small Business Economics Springer US; http://www.springer-ny.com 36/3(2011-04-01), 299-321 0921-898X 36:3<299 2011 36 11187 https://doi.org/10.1007/s11187-009-9223-5 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11187-009-9223-5 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- van Eijkel Remco University of Groningen, Groningen, The Netherlands aut NATIONALLICENCE 700 1- Hermes Niels University of Groningen, Groningen, The Netherlands aut NATIONALLICENCE 700 1- Lensink Robert University of Groningen, Groningen, The Netherlands aut NATIONALLICENCE 773 0- Small Business Economics Springer US; http://www.springer-ny.com 36/3(2011-04-01), 299-321 0921-898X 36:3<299 2011 36 11187 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer