Optimal group size in microlending

Microlending, where a bank lends to small group of people without credit histories, began with the Grameen Bank in Bangladesh, and is widely seen as creation Muhammad Yunus, who received Nobel Peace Prize recognition his largely successful efforts. Since that time modeling microlending has fair amount academic attention. One issues not yet addressed full detail, however, issue size group. Some attention nevertheless been paid using an experimental game theory approach. We, instead, take mathematical approach optimal size, goal minimize probability default To do this, one create model interacting forces, make precise hypotheses model. We show original choice five people, is, under right, and, we believe, reasonable hypotheses, either close optimal, or even at times exactly i.e., indeed people.