IDEAS home Printed from https://ideas.repec.org/a/taf/jdevst/v34y1998i3p44-61.html
   My bibliography  Save this article

How to lend like mad and make a profit: A micro-credit paradigm versus the start-up fund in South Africa

Author

Listed:
  • Jens Reinke

Abstract

In current debates about micro-credit, joint-liability schemes are often viewed as the only viable way to non-collateralised lending, and are thus seen as almost synonymous with micro-credit. This article reports about an alternative, non-participatory approach to micro-credit. Prompted by the apparent inability of group credit schemes to reign in lending costs, the article sets out the institutional requirements for cheap, 'mass-produced' credit. It argues that such credit can be viable if mechanisms are in place enforcing the self-selection of potential borrowers and self-motivation of existing borrowers. The analysis of a 'mass-minimalist' micro-credit institution from South Africa supports the argument.

Suggested Citation

  • Jens Reinke, 1998. "How to lend like mad and make a profit: A micro-credit paradigm versus the start-up fund in South Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 34(3), pages 44-61.
    • Handle: RePEc:taf:jdevst:v:34:y:1998:i:3:p:44-61
    DOI: 10.1080/00220389808422520
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00220389808422520
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00220389808422520?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
    2. Braverman, Avishay & Guasch, J. Luis, 1989. "Rural credit in developing countries," Policy Research Working Paper Series 219, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marek HUDON & Tchakodo OURO‐KOURA, 2008. "Etude Des Facteurs Contingents Du Taux De Remboursement Au Sein D'Une Institution De, Microfinance: Le Cas Du Togo," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(2), pages 301-322, June.
    2. J. Lara‐Rubio & A. Blanco‐Oliver & R. Pino‐Mejías, 2017. "Promoting Entrepreneurship at the Base of the Social Pyramid via Pricing Systems: A case Study," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 24(1), pages 12-28, January.
    3. Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto & Nydia M. Reyes, 2013. "A Social Approach to Microfinance Credit Scoring," Working Papers CEB 13-013, ULB -- Universite Libre de Bruxelles.
    4. Mohamed, Toka S. & Elgammal, Mohammed M., 2023. "Credit risk in Islamic microfinance institutions: The role of women, groups, and rural borrowers," Emerging Markets Review, Elsevier, vol. 54(C).
    5. Richa Agarwal & Ashok Kumar Pokhriyal, 2022. "The moderating effect of attitude to risk on the role of microfinance in entrepreneurship development in Uttarakhand region, India," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 107-117, December.
    6. Ibtissem Baklouti, 2013. "Determinants of Microcredit Repayment: The Case of Tunisian Microfinance Bank," African Development Review, African Development Bank, vol. 25(3), pages 370-382, September.
    7. Jorge Mota & António Carrizo Moreira & Cristóvão Brandão, 2018. "Determinants of microcredit repayment in Portugal: analysis of borrowers, loans and business projects," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 17(3), pages 141-171, November.
    8. Dorfleitner, G. & Just-Marx, S. & Priberny, C., 2017. "What drives the repayment of agricultural micro loans? Evidence from Nicaragua," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 89-100.
    9. Mark Schreiner, 2001. "A Scoring Model of the Risk of Costly Arrears at a Microfinance Lender in Bolivia," Development and Comp Systems 0109005, University Library of Munich, Germany.
    10. Maria Patricia Durango‐Gutiérrez & Juan Lara‐Rubio & Andrés Navarro‐Galera, 2023. "Analysis of default risk in microfinance institutions under the Basel III framework," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1261-1278, April.
    11. Rayo Cantón, Salvador & Lara Rubio, Juan & Camino Blasco, David, 2010. "A Credit Scoring Model For Institutions Of Microfinance Under The Basel Ii Normative," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 15(28), pages 89-124.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Asad K. Ghalib & Issam Malki & Katsushi S. Imai, 2012. "Microfinance and its role in household poverty reduction: findings from Pakistan," Global Development Institute Working Paper Series 17312, GDI, The University of Manchester.
    2. M. Jahangir Alam Chowdhury & Dipak Ghosh & Robert E. Wright, 2005. "The impact of micro-credit on poverty: evidence from Bangladesh," Progress in Development Studies, , vol. 5(4), pages 298-309, October.
    3. Gunhild Berg, 2010. "Evaluating The Impacts Of Microsaving: The Case Of Sewa Bank In India," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(1), pages 75-96, March.
    4. Eshetu Bekele & Zeleke Worku, 2008. "Factors That Affect The Long‐Term Survival Of Micro, Small And Medium Enterprises In Ethiopia," South African Journal of Economics, Economic Society of South Africa, vol. 76(3), pages 548-568, September.
    5. Hans Binswanger & Shahidur Khandker, 1995. "The impact of formal finance on the rural economy of India," Journal of Development Studies, Taylor & Francis Journals, vol. 32(2), pages 234-262.
    6. Islam, Mohammad & Khatun, M.A. & Hossain, D. & Alom, J., 2012. "Micro-credit programmes of different NGOs/MFIs: A comparative study," Journal of the Bangladesh Agricultural University, Bangladesh Agricultural University Research System (BAURES), vol. 10.
    7. Agricultural Economics Association of Southern Africa, 1995. "Back Matter," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 34(01), March.
    8. Shahnaz Abdullah & Shakil Quayes, 2016. "Do women borrowers augment financial performance of MFIs?," Applied Economics, Taylor & Francis Journals, vol. 48(57), pages 5593-5604, December.
    9. Vincent, Ng’eno & Muiruri, Erick Jotham & Nyangweso, Philiph Mulama & Langat, B. K. & Kipsat, Mary Jepkemboi, 2011. "Farmers Inaccessibility to Agricultural Credit in Nyandarua District, Kenya," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 1(04), pages 1-6, December.
    10. Mahabub Hossain, 2004. "Rural Non-Farm Economy in Bangladesh: A View from Household Surveys," CPD Working Paper 40, Centre for Policy Dialogue (CPD).
    11. Tanjinul Hoque Mollah & Sharmin Shishir & Wahid Ullah & Takaaki Nihei, 2019. "Assessing NGOs micro-credit programs: a geo-spatial and socio-economic scenario from rural Bangladesh," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(2), pages 79-99, June.
    12. John W. Mellor, 2001. "Employment Multipliers from Agricultural Growth and Poverty Reduction," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 371-400.
    13. Khan, Md Faisal Abedin & Uddin, Md Sazib & Giessen, Lukas, 2021. "Microcredit expansion and informal donor interests: Experiences from local NGOs in the Sundarbans Mangrove Forest, Bangladesh," World Development Perspectives, Elsevier, vol. 21(C).
    14. Souksavanh VIXATHEP & Nobuaki MATSUNAGA, 2015. "Entrepreneurial Human and Social Capital in Small Businesses in Vietnam - An Extended Analysis -," GSICS Working Paper Series 29, Graduate School of International Cooperation Studies, Kobe University.
    15. Pei Guo & Xiangping Jia, 2009. "The structure and reform of rural finance in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 1(2), pages 212-226, January.
    16. Martin Ravallion, 2013. "The Idea of Antipoverty Policy," NBER Working Papers 19210, National Bureau of Economic Research, Inc.
    17. Norton, George W. & Alwang, Jeffrey, 1997. "Policy for Plenty: Measuring the Benefits of Policy-oriented Social Science Research," Staff Papers 232552, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    18. Emran, M. Shahe & Shilpi, Forhad, 2021. "Microfinance, Moneylenders, and Economic Shocks: An Assessment of the Bangladesh Experience," MPRA Paper 111159, University Library of Munich, Germany.
    19. R. Varisa Patraporn, 2015. "Complex transactions: Community development financial institutions lending to ethnic entrepreneurs in Los Angeles," Community Development, Taylor & Francis Journals, vol. 46(5), pages 479-498, December.
    20. Stephen Ngige Ng’ang’a & Maurice M. Sakwa, 2015. "Social Factors that Influence Loan Accessibility by Youth Entrepreneurs in Kenya: A Case of Youth Enterprise Development Fund in Gatundu South Constituency," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(11), pages 230-248, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jdevst:v:34:y:1998:i:3:p:44-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/FJDS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.