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Microfinance Institutions (microfinance + institution)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting61%
Humanities and Social Sciences38%

Selected Abstracts

PERFORMANCE ANALYSIS FOR A SAMPLE OF MICROFINANCE INSTITUTIONS IN INDIA

ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 2 2008
Alain De CROMBRUGGHE
ABSTRACT,:,We use regression analysis to study the determinants of self-sustainability of a sample of microfinance institutions in India. These institutions stand out by their ability and willingness to report financial and operational data to Sa Dhan, a know-how sharing organization. We investigate particularly three aspects of sustainability: cost coverage by revenue, repayment of loans and cost-control. Our results suggest that the challenge of covering costs on small and partly unsecured loans can indeed be met, without necessarily increasing the size of the loans or raising the monitoring cost. The analysis suggests other ways to improve the financial results, like a better targeting of the interest rate policy or increasing the number of borrowers per field officer especially in collective delivery models. [source]

BENIN: Corrupt Microfinance Institutions

AFRICA RESEARCH BULLETIN: ECONOMIC, FINANCIAL AND TECHNICAL SERIES, Issue 12 2009
Article first published online: 6 FEB 200
No abstract is available for this article. [source]

Which Microfinance Institutions Are Becoming More Cost Effective with Time?

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 4 2009
Evidence from a Mixture Model
microfinance; mixture model; Eastern Europe; Central Asia Microfinance institutions (MFIs) play a key role in many developing countries. Utilizing data from Eastern Europe and Central Asia, MFIs are found to generally operate with lower costs the longer they are in operation. Given the differences in operating environments, subsidies, and organizational form, this finding of increasing cost effectiveness may not aptly characterize all MFIs. Estimation of a mixture model reveals that roughly half of the MFIs are able to operate with reduced costs over time, while half do not. Among other things, we find that larger MFIs offering deposits and those receiving lower subsidies operate more cost effectively over time. [source]

The Question of Sustainability for Microfinance Institutions,

JOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 1 2007
J. Jordan Pollinger
Microentrepreneurs have considerable difficulty accessing capital from mainstream financial institutions. One key reason is that the costs of information about the characteristics and risk levels of borrowers are high. Relationship-based financing has been promoted as a potential solution to information asymmetry problems in the distribution of credit to small businesses. In this paper, we seek to better understand the implications for providers of "microfinance" in pursuing such a strategy. We discuss relationship-based financing as practiced by microfinance institutions (MFIs) in the United States, analyze their lending process, and present a model for determining the break-even price of a microcredit product. Comparing the model's results with actual prices offered by existing institutions reveals that credit is generally being offered at a range of subsidized rates to microentrepreneurs. This means that MFIs have to raise additional resources from grants or other funds each year to sustain their operations as few are able to survive on the income generated from their lending and related operations. Such subsidization of credit has implications for the long-term sustainability of institutions serving this market and can help explain why mainstream financial institutions have not directly funded microenterprises. We conclude with a discussion of the role of nonprofit organizations in small business credit markets, the impact of pricing on their potential sustainability and self-sufficiency, and the implications for strategies to better structure the credit market for microbusinesses. [source]

Which Microfinance Institutions Are Becoming More Cost Effective with Time?

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 4 2009
Evidence from a Mixture Model
microfinance; mixture model; Eastern Europe; Central Asia Microfinance institutions (MFIs) play a key role in many developing countries. Utilizing data from Eastern Europe and Central Asia, MFIs are found to generally operate with lower costs the longer they are in operation. Given the differences in operating environments, subsidies, and organizational form, this finding of increasing cost effectiveness may not aptly characterize all MFIs. Estimation of a mixture model reveals that roughly half of the MFIs are able to operate with reduced costs over time, while half do not. Among other things, we find that larger MFIs offering deposits and those receiving lower subsidies operate more cost effectively over time. [source]

Lessons from a microfinance recapitalisation programme

DISASTERS, Issue 2 2010
Angus Poston
Following a major disaster, microfinance institutions (MFIs) often face high levels of bad debt, which may require the institutions to be recapitalised. This paper describes a recapitalisation programme implemented by the SANASA movement of Sri Lanka in 390 microfinance societies following the December 2004 tsunami, and highlights lessons for other similar programmes. MFI recapitalisation is a good use of funds in post-disaster situations. To create successful programmes, donors should expect to relax some of their usual project requirements and MFIs should focus on maintaining credit discipline. [source]

HSBC brings a business model of banking to the doorsteps of the poor

GLOBAL BUSINESS AND ORGANIZATIONAL EXCELLENCE, Issue 2 2009
Pramod Marar
Tiny loans can make a huge difference, especially when coupled with financial literacy and capacity building. With a global commitment to sustainable business through financial inclusion, HSBC partners with microfinance institutions and other organizations to empower micro-entrepreneurs among India's rural poor, who in turn are changing lives, families, and entire communities. The authors provide an overview of HSBC Group's sustainability strategy, a brief history of microfinance in India, and HSBC in India's role in serving the microfinance industry. They also discuss the bank's multi-stakeholder initiatives for capacity building, which include two schools where rural women learn essential business and technical skills and financial literacy, and an environmental and social village-based initiative for water conservation and livelihood creation. © 2009 Wiley Periodicals, Inc. [source]

The Question of Sustainability for Microfinance Institutions,

JOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 1 2007
J. Jordan Pollinger
Microentrepreneurs have considerable difficulty accessing capital from mainstream financial institutions. One key reason is that the costs of information about the characteristics and risk levels of borrowers are high. Relationship-based financing has been promoted as a potential solution to information asymmetry problems in the distribution of credit to small businesses. In this paper, we seek to better understand the implications for providers of "microfinance" in pursuing such a strategy. We discuss relationship-based financing as practiced by microfinance institutions (MFIs) in the United States, analyze their lending process, and present a model for determining the break-even price of a microcredit product. Comparing the model's results with actual prices offered by existing institutions reveals that credit is generally being offered at a range of subsidized rates to microentrepreneurs. This means that MFIs have to raise additional resources from grants or other funds each year to sustain their operations as few are able to survive on the income generated from their lending and related operations. Such subsidization of credit has implications for the long-term sustainability of institutions serving this market and can help explain why mainstream financial institutions have not directly funded microenterprises. We conclude with a discussion of the role of nonprofit organizations in small business credit markets, the impact of pricing on their potential sustainability and self-sufficiency, and the implications for strategies to better structure the credit market for microbusinesses. [source]

MICROFINANCE REVOLUTION: ITS EFFECTS, INNOVATIONS, AND CHALLENGES

THE DEVELOPING ECONOMIES, Issue 1 2010
Hisaki KONO
F35; O19 "Microfinance revolution" is the term often applied to the successful expansion of small-scale financial services to the poor with high repayment records in developing countries. The present paper investigates the extent to which the microfinance revolution is truly revolutionary. More specifically, it explores the impact of microfinance institutions on the poor, the mechanisms underlying high repayment rates and their innovations, and the new challenges microfinance institutions are currently facing. Different from the existing published survey literature, we focus on current topics and attempt to show recent theoretical developments in a comprehensive manner using simplified models with very similar settings. We contend that microfinance is developing in a promising direction but has yet to reach its full potential. [source]

The empirics of microfinance: what do we know?

THE ECONOMIC JOURNAL, Issue 517 2007
Niels Hermes
Microfinance has received a lot of attention recently, both from policy makers as well as in academic circles. Two of the main topics that have been hotly debated are explaining joint liability group lending and its implications for reducing information asymmetries, and the trade-off between the financial sustainability and outreach of microfinance programmes. This Feature contains three novel empirical contributions providing new insights with respect to why and how joint liability group lending works. It also contains the first large-scale systematic analysis of the trade-off between financial performance and outreach of microfinance institutions. [source]

PERFORMANCE ANALYSIS FOR A SAMPLE OF MICROFINANCE INSTITUTIONS IN INDIA

ANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 2 2008
Alain De CROMBRUGGHE
ABSTRACT,:,We use regression analysis to study the determinants of self-sustainability of a sample of microfinance institutions in India. These institutions stand out by their ability and willingness to report financial and operational data to Sa Dhan, a know-how sharing organization. We investigate particularly three aspects of sustainability: cost coverage by revenue, repayment of loans and cost-control. Our results suggest that the challenge of covering costs on small and partly unsecured loans can indeed be met, without necessarily increasing the size of the loans or raising the monitoring cost. The analysis suggests other ways to improve the financial results, like a better targeting of the interest rate policy or increasing the number of borrowers per field officer especially in collective delivery models. [source]

The "Moral Hazards" of Microfinance: Restructuring Rural Credit in India

ANTIPODE, Issue 1 2010
Stephen Young
Abstract:, This paper explores how economic ideas are produced, how they travel, and how they are contested, in complex and contingent ways, in particular places. It stems from events that took place in coastal Andhra Pradesh, India, where I conducted fieldwork on microfinance programs during 2007. I begin by tracing how the practices of microfinance,and the ideas and rationalities underpinning them,have been increasingly globalized as a development tool since the 1970s. I then move on to describe the proliferation of various microfinance programs across Andhra Pradesh over the last decade. In the closing section, I consider the implications of a recent protest that took place against commercial microfinance institutions in the region. [source]