The enforcement advantage of external monitoring: Lessons from an experiment with joint-liability groups in Burkina Faso

•We analyse the roles of lender monitoring in joint-liability credit groups through a randomized control trial.•We find that lender monitoring crowds out monitoring by the group leader.•The identity of the monitor affects the discipline in the group: external monitoring leads to more severity in loan renewal and more leniency in the sanctioning of default (except in the case of shirking).•External monitoring may lead to greater impartiality towards members of the leader?s family and improve the efficiency of the group management.