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Asymmetric Finance: Issues in Microfinance

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  • Lash, Nicholas A.

Abstract

This study surveys microfinance institutions (MFI) which are designed to provide loans and other financial services to the poor, particularly women. Although innovations have reduced loan defaults, most MFIs are losing money. The most profitable MFIs target the upper-end of the poor thereby raising concerns of mission drift. Because profitable MFIs tend to be the largest and most experienced, there is hope that growth over time will lead to self-sufficiency. Increasingly, MFIs are evolving into full-service entities which are raising increasing amounts of commercial funds.

Suggested Citation

  • Lash, Nicholas A., 2008. "Asymmetric Finance: Issues in Microfinance," The Journal of Economic Asymmetries, Elsevier, vol. 5(1), pages 93-107.
    • Handle: RePEc:eee:joecas:v:5:y:2008:i:1:p:93-107
    DOI: 10.1016/j.jeca.2008.01.008
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    References listed on IDEAS

    as
    1. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    2. Patrick Honohan, 2004. "Financial Sector Policy and the Poor : Selected Findings and Issues," World Bank Publications - Books, The World Bank Group, number 14874.
    3. Robert Cull & Asli Demirguç-Kunt & Jonathan Morduch, 2007. "Financial performance and outreach: a global analysis of leading microbanks," Economic Journal, Royal Economic Society, vol. 117(517), pages 107-133, February.
    4. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2004. "Finance, inequality, and poverty: cross-country evidence," Policy Research Working Paper Series 3338, The World Bank.
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    More about this item

    Keywords

    G21; O16; Microfinance; Microfinancial institutions; Group lending; Regulation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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