The typical MFI contract involves loans to a group of borrowers, who are liable for each other’s loans and hence have a reason to try to make sure that the others repay. Some organizations expect the borrowers to know each other when they come to borrow, whereas others bring them together by making them come to weekly meetings. The very act of meeting together every week helps clients know each other better and become more willing to help out a group member who faces a temporary difficulty.
