A lending organization, inspired by the Grameen Bank, is attempting to provide loans to small farmers. It is lending to farmers in groups of two (say).

(a) Provide at least two reasons why a strategy of group lending may be better than a strategy of lending to individuals. Provide at least two reasons why it may be worse.

(b) A sequential lending strategy is one in which group members are given loans in some order, with the next member receiving a loan only after the earlier member has repaid. A simultaneous lending strategy is one in which all group members are given loans at the same time. In both cases, assume that default by any one member blacklists the whole group. Compare and contrast these two strategies.