Cull, RobertDemirgüç-Kunt, AsliMorduch, Jonathan2012-05-302012-05-302008-05https://hdl.handle.net/10986/6690Microfinance institutions have proved the possibility of providing reliable banking services to poor customers. Their second aim is to do so in a commercially-viable way. This paper analyzes the tensions and opportunities of microfinance as it embraces the market, drawing on a data set that includes 346 of the world's leading microfinance institutions and covers nearly 18 million active borrowers. The data show remarkable successes in maintaining high rates of loan repayment, but the data also suggest that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women. Those institutions, as a group, charge their customers the highest fees in the sample but also face particularly high transaction costs, in part due to small transaction sizes. Innovations to overcome the well-known problems of asymmetric information in financial markets were a triumph, but further innovation is needed to overcome the challenges of high costs.CC BY 3.0 IGOACCESS TO BANKSACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO LOANSACCOUNTINGACCOUNTING STANDARDSAFFILIATEAGRICULTURAL ECONOMICSASYMMETRIC INFORMATIONAUTOMATED TELLER MACHINESAVERAGE INTERESTAVERAGE INTEREST RATEBANK BORROWERSBANK CREDITBANK CUSTOMERSBANK LOANBANK POLICYBANKING SERVICESBORROWERBORROWINGBUSINESS LOANSBUSINESS SCHOOLSCALCULATIONSCAPITAL COSTSCAPITAL INVESTMENTCAPITAL MARKETCAPITAL MARKETSCASH FLOWSCOLLATERALCOMMERCIAL BANKCOMMERCIAL BANKSCOMMERCIAL BORROWINGCOMMERCIAL INVESTMENTCONSUMERCONSUMER LOANSCONTRIBUTIONSCOST OF CAPITALCREDIT ACCESSCREDIT COOPERATIVESCREDIT MARKETSCREDIT UNIONCREDIT UNIONSCUSTOMER BASEDEBIT CARDSDEBTDEFAULT RATESDEFAULTERSDEPOSITDEPOSITORSDEPOSITSDEVELOPING COUNTRIESDEVELOPING ECONOMIESDONOR SUPPORTEARNINGSECONOMIC DEVELOPMENTECONOMIC GROWTHEMPLOYMENTENTREPRENEURSEXCHANGE RATEFACE VALUEFAMILIESFAMILY MEMBERSFARM ENTERPRISESFARMERSFEMALE BORROWERSFINANCIAL ACCESSFINANCIAL DATAFINANCIAL INFORMATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARYFINANCIAL LIVESFINANCIAL MAINSTREAMFINANCIAL MARKETSFINANCIAL MEASURESFINANCIAL OPTIONSFINANCIAL PERFORMANCEFINANCIAL SELF - SUFFICIENCYFINANCIAL SELF-SUFFICIENCYFINANCIAL STATEMENTSFINANCIAL STRUCTUREFINANCIAL SUSTAINABILITYFINANCIAL TRANSACTIONSFIXED COSTSFOREIGN CAPITALFOREIGN DONORSFOREIGN INVESTMENTFORMAL FINANCIAL SERVICESFUTURE LOANSGENDERGENDER EQUALITYGENERAL PUBLICGLOBAL CAPITALGLOBAL CAPITAL MARKETSGLOBALIZATIONGOVERNMENT BANKSGROUP LENDINGGROUP-LENDINGGROUP-LENDING CONTRACTSHANDICRAFTSHIDDEN SUBSIDIESHIGH INTEREST RATESHOLDINGSHOUSEHOLD INCOMEHOUSEHOLDSIMPLICIT SUBSIDIESIMPLICIT SUBSIDYINCOME DISTRIBUTIONINCOME LEVELINCOMESINFLATIONINITIAL PUBLIC OFFERINGINSENSITIVITYINSTALLMENTSINSURANCEINTEREST INCOMEINTEREST RATEINTERNATIONAL ACCOUNTING STANDARDSINTERNATIONAL BANKINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL FINANCIAL STATISTICSINTERNATIONAL STANDARDSINVESTINGIPOJOINT LIABILITYLENDING INTEREST RATELIQUIDITYLOANLOAN APPLICANTSLOAN DECISIONLOAN LOSS PROVISIONSLOAN PAYMENTSLOAN PORTFOLIOLOAN PORTFOLIO QUALITYLOAN PORTFOLIOSLOAN PRODUCTSLOAN REPAYMENTLOAN REPAYMENT RATESLOAN REPAYMENTSLOAN SIZELOAN SIZESLOCAL CURRENCYLONG-TERM LIABILITIESLOW COSTLOW-INCOMELOW-INCOME CUSTOMERSLOW-INCOME PEOPLEMARKET DATAMFIMFISMICRO-CREDITMICRO-FINANCEMICRO-LOANSMICROCREDITMICROENTERPRISESMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMICROFINANCE LENDINGMICROFINANCE LOANSMICROFINANCE SECTORMONETARY FUNDMONEYLENDERMONEYLENDERSMUTUAL FUNDNON-PERFORMING LOANSOPERATING COSTOPERATING COSTSOPERATING EXPENSESOUTREACHOUTSTANDING BALANCEPOLITICAL RISKPOOR BORROWERSPOOR COMMUNITIESPORTFOLIO QUALITYPOVERTY LEVELSPRIME RATEPRIVATE INVESTORSPRIVATE SECTOR BANKSPRODUCTIVITYPROFITABILITYPRUDENTIAL REGULATIONPUBLIC ECONOMICSPUBLIC POLICYPURCHASING POWERPURCHASING POWER PARITYRECENT LOANSREPAYMENT INCENTIVESREPAYMENT RATESRESERVERESERVESRETAINED EARNINGSRETURNRETURN ON ASSETSRETURN ON EQUITYRETURNSRURAL BANKRURAL BANKSRURAL FINANCIAL MARKETSSALESAVINGSSAVINGS DEPOSITSSAVINGS PRODUCTSSENIORSMALL BUSINESSESSMALL LOANSSOCIAL MISSIONSSOCIALLY RESPONSIBLE INVESTORSSOFT LOANSSOLIDARITY GROUP LENDINGSTART-UPSTATE BANKSSUBSIDIZATIONTAXTIME DEPOSITSTOTAL COSTSTRANSACTIONTRANSACTION COSTSTRANSACTIONS COSTSVALUABLEVALUE ADDED TAXESVILLAGEVILLAGESWORTHWorld Bank10.1596/1813-9450-4630