Language:

Microfinance Meets the Market

The Journal of economic perspectives, 2009, Vol.23 (1), p.167-192 [Peer Reviewed Journal]

Copyright 2009 American Economic Association ;World Bank ;Copyright American Economic Association Winter 2009 ;ISSN: 0895-3309 ;EISSN: 1944-7965 ;DOI: 10.1257/jep.23.1.167

Digital Resources/Online E-Resources

Citations Cited by

Actions
1. Add to My Research
2. Remove from My Research
3. E-mail
4. Print
5. Permalink
6. Citation
7. EasyBib
8. EndNote
9. RefWorks
10. Delicious
11. Export RIS
12. Export BibTeX

Title:
Microfinance Meets the Market
Author: Cull, Robert ; Demirgüç-Kunt, Asli ; Morduch, Jonathan
Subjects: Bank loans ; Bank operations ; Banking industry ; Banks ; Business models ; Collateral ; Corporate Finance and Governance O160 ; Development economics ; Economic activity ; Economic Development: Financial Markets ; Financial services ; Financing methods ; Firm Performance: Size, Diversification, and Scope L250 ; Income redistribution ; Initial public offering ; Interest rates ; Investors ; Loans ; Micro Finance Institutions ; Microfinance ; Mortgages G210 ; NGOs L310 ; Nongovernmental organizations ; Nonprofit Institutions ; Nonprofit organizations ; Other Depository Institutions ; Private sector ; Retail banking ; Saving and Capital Investment ; Statistical median ; Studies ; Subsidies
Is Part Of: The Journal of economic perspectives, 2009, Vol.23 (1), p.167-192
Description: In this paper, we examine the economic logic behind microfinance institutions and consider the movement from socially oriented nonprofit microfinance institutions to for-profit microfinance. Drawing on a large dataset that includes most of the world's leading microfinance institutions, we explore eight questions about the microfinance "industry": Who are the lenders? How widespread is profitability? Are loans in fact repaid at the high rates advertised? Who are the customers? Why are interest rates so high? Are profits high enough to attract profit-maximizing investors? How important are subsidies? The evidence suggests that investors seeking pure profits would have little interest in most of the institutions we see that are now serving poorer customers. We will suggest that the future of microfinance is unlikely to follow a single path. The recent clash between supporters of profit-driven Banco Compartamos and of the Grameen Bank with its "social business" model offers us a false choice. Commercial investment is necessary to fund the continued expansion of microfinance, but institutions with strong social missions, many taking advantage of subsidies, remain best placed to reach and serve the poorest customers, and some are doing so at a massive scale. The market is a powerful force, but it cannot fill all gaps.
Publisher: Nashville: American Economic Association
Language: English
Identifier: ISSN: 0895-3309
EISSN: 1944-7965
DOI: 10.1257/jep.23.1.167
Source: Open Knowledge Repository

Back to results list


INSPIRE LIBRARY - TON DUC THANG UNIVERSITY	(84-028) 37 755 057	Feedback
19 Nguyen Huu Tho St. Dist.7, HCM	thuvien@tdtu.edu.vn	Feedback

Microfinance Meets the Market

Copyright 2009 American Economic Association ;World Bank ;Copyright American Economic Association Winter 2009 ;ISSN: 0895-3309 ;EISSN: 1944-7965 ;DOI: 10.1257/jep.23.1.167

Searching Remote Databases, Please Wait