Please read relavant chapters of Ëconomics of Microfinance by Armendariz and Morduch, 2005.
Furthermore, Microfinance Promise by Morduch, 1999, JEL.
Read adverse selection and moral hazard problems in the context of group based lending...
If you want to get indepth knoweldge please read Ghatak, 1999 JDE paper given below
Ghatak, M. (1999). Group lending, local information and peer selection. Journal of Development Economics, 60(1), pp. 27–50. Ghatak, M. (2000). Screening by the company you keep: joint liability lending and the peer selection effect. Economic Journal, 110(465), pp. 601–31.
Jain, S., & Mansuri, G. (2003). A little at a time: the use of regularly scheduled repayments in microfinance programs. Journal of Development Economics, 72(1), pp. 253-279.
Huppi, M., & Feder, G. (1990). The role of groups and credit cooperatives in rural lending. World Bank Research Observer, 5, pp. 187-204.