Publication: Microfinance Tradeoffs : Regulation, Competition, and Financing
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2009-10-01
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2012-03-19
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This paper describes important trade-offs that microfinance practitioners, donors, and regulators navigate. Drawing evidence from large, global surveys of microfinance institutions, the authors find a basic tension between meeting social goals and maximizing financial performance. For example, non-profit microfinance institutions make far smaller loans on average and serve more women as a fraction of customers than do commercialized microfinance banks, but their costs per dollar lent are also much higher. Potential trade-offs therefore arise when selecting contracting mechanisms, level of commercialization, rigor of regulation, and the extent of competition. Meaningful interventions in microfinance will require making deliberate choices - and thus embracing and weighing tradeoffs carefully.
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“Cull, Robert; Demirgüç-Kunt, Asli; Morduch, Jonathan. 2009. Microfinance Tradeoffs : Regulation, Competition, and Financing. Policy Research Working Paper ; No. 5086. © World Bank. http://hdl.handle.net/10986/4278 License: CC BY 3.0 IGO.”
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