1 If we want to succeed we must rely on trust

The success of many micro-credit initiatives is difficult to account for in the traditional economic framework, where, mainly because of the assumptions of self-interested behavior and asymmetric informa-tion, credit is rationed and provided only to those able to back it with collateral. Alternative explanations consider the role of key fac-tors such as group lending, joint liability, social collateral or dynamic incentives. In this paper we first critically discuss these lines of expla-nation, secondly introduce the concept of trust responsiveness to shed light upon the fiduciary aspects involved in the lender-borrower rela-tionship; thirdly, we formalize this relationship by means of a psycho-logical trust game that helps in isolating the function and the rationale of several important features of many micro-credit initiatives, such as the refusal to use formal contracts and wide recourse to face-to-face interactions