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Microfinance Commercialisation, Challenges and Issues in Developing Countries: A Critical Literature Review

Author

Listed:
  • Agus Eko Nugroho

    (Indonesian Institute of Science (LIPI) and PhD candidate at the School of Economics and Finance, Curtin University of Technology, Australia)

Abstract

This paper aims at reviewing empirical literature on the performance and issues associated with commercialisation of microfinance institutions (MFIs). The popular approach believes that commercial-based operation can lead to financial self-sustainability without reducing the role to assist the poor. Although the growth in financial intermediation is evident, many commercialised MFIs remain dependence on subsidy and fail to achieve a greater outreach. Hence, this approach highly undermines the social mission of microfinance to reach the poorest of the poor

Suggested Citation

  • Agus Eko Nugroho, 2006. "Microfinance Commercialisation, Challenges and Issues in Developing Countries: A Critical Literature Review," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 54, pages 173-195, August.
    • Handle: RePEc:lpe:efijnl:200607
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    More about this item

    Keywords

    Microfinance; Commercialisation; Developing Country;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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