Cull, RobertDemirgüç-Kunt, AsliMorduch, Jonathan2012-03-192012-03-192009-10-01https://hdl.handle.net/10986/4278This 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.CC BY 3.0 IGOACCESS TO FINANCEACCOUNTINGADMINISTRATIVE BURDENSADVERSE SELECTIONAFFILIATEALLOCATION OF CAPITALASYMMETRIC INFORMATIONBANK BRANCHESBANK POLICYBANKING SECTORBANKING SERVICESBANKSBORROWERBORROWINGCAPITAL COSTSCAPITAL MARKETSCOLLATERALCOMMERCIAL BANKSCOMMERCIAL FUNDINGCOMMERCIAL LENDERSCOMMERCIAL LENDINGCOMMERCIAL TERMSCONFIDENTIALITYCOST OF CAPITALCOST OF FUNDSCREDIT BUREAUSCREDIT MARKETDELINQUENCY RATESDEMAND FOR CREDITDEPOSITDEPOSIT ACCOUNTSDEPOSIT RATEDEPOSIT-TAKING INSTITUTIONSDEPOSITSDEVELOPING COUNTRIESDOUBLE BOTTOM LINEDUMMY VARIABLESENTREPRENEURSFEMALE CLIENTSFINANCIAL ACCESSFINANCIAL DATAFINANCIAL INFORMATIONFINANCIAL INSTITUTIONSFINANCIAL PERFORMANCEFINANCIAL RATIOSFINANCIAL RETURNSFINANCIAL SELF-SUFFICIENCYFINANCIAL SELF-SUSTAINABILITYFINANCIAL SERVICESFINANCIAL SUSTAINABILITYFUNDING SOURCESGOVERNANCE INDICATORSGRAMEEN BANKGROWTH RATEHOUSEHOLDSIMPLICIT SUBSIDIESINCOMEINCOME DISTRIBUTIONINCOME LEVELSINFLATIONINFORMATION ASYMMETRIESINSTITUTIONAL DEVELOPMENTINSURANCEINTEREST RATEINTEREST RATESINTEREST RATES ON LOANSINTERNATIONAL BANKINTERNATIONAL BANKINGINTERNATIONAL FINANCIAL STATISTICSJOINT LIABILITYLABOR COSTSLENDERLENDING AGREEMENTSLOANLOAN DELINQUENCIESLOAN DELINQUENCYLOAN PORTFOLIOLOAN PORTFOLIOSLOAN QUALITYLOAN REPAYMENTLOAN REPAYMENT RATESLOAN SIZELOAN SIZESMARKET FAILURESMARKET INFORMATIONMARKET MECHANISMMEASURES OF PROFITABILITYMFIMICROBANKINGMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMICROFINANCE PRACTITIONERSMICROFINANCE SECTORMOBILE BANKINGMONETARY FUNDMORAL HAZARDNONBANK FINANCIAL INSTITUTIONSOPEN MARKETOPERATING COSTOPERATING COSTSOPPORTUNITY COSTOUTREACHOWNERSHIP STRUCTUREPOOR BORROWERSPOOR HOUSEHOLDSPORTFOLIO QUALITYPROFITABILITYPRUDENTIAL REGULATIONPRUDENTIAL SUPERVISIONPUBLIC OFFERINGRATES OF INTERESTREGULATORREGULATORSREGULATORY AUTHORITYREGULATORY ENVIRONMENTREMITTANCEREMITTANCE SERVICESRETURNRETURN ON ASSETSRETURN ON EQUITYRETURNSRISK SHARINGSAVINGSSMALL LOANSSOURCE OF FUNDSSUBSIDIZATIONTRANSACTIONTRANSACTION COSTSTRANSACTIONS COSTSVILLAGEVILLAGE BANKSWOMEN BORROWERSWorld Bank10.1596/1813-9450-5086