IDEAS home Printed from https://ideas.repec.org/p/sol/wpaper/09-017.html
   My bibliography  Save this paper

Discrimination in Microfinance: The Role of Credit Officers

Author

Listed:
  • Marc Labie
  • Pierre-Guillaume Méon
  • Ariane Szafarz

Abstract

This paper studies how high-powered incentives may affect credit officers’ discriminatory practices in microfinance institutions. Using an agency model applied to a non-profit MFI, we argue that incentive contracts may help align the officer’s behavior with the MFI’s mission. However, since incentives are costly, and the MFI’s budget is limited, even a benevolent institution faces a trade-off between fighting discrimination and raising outreach. Welfare maximization may not imply full eradication of discriminatory practices. A non discriminating welfare-maximizing MFI may thus prefer paying smaller incentives, and letting its credit officer discriminate to some extent.

Suggested Citation

  • Marc Labie & Pierre-Guillaume Méon & Ariane Szafarz, 2009. "Discrimination in Microfinance: The Role of Credit Officers," Working Papers CEB 09-017.RS, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:09-017
    as

    Download full text from publisher

    File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/53974/1/RePEc_sol_wpaper_09-017.pdf
    File Function: RePEc_sol_wpaper_09-017
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Silvia Dorado & Ying Chen & Andrea M. Prado & Virginia Simon, 2022. "Attuned HRM Systems for Social Enterprises," Journal of Business Ethics, Springer, vol. 178(3), pages 829-848, July.
    2. Nicola Banks & Dan Brockington & David Hulme & Mathilde Maitrot, 2019. "Interrogating Microfinance Performance Beyond Products, Clients and the Environment: Insights From the Work of BRAC in Tanzania," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(3), pages 339-363, July.

    More about this item

    Keywords

    Microfinance; Discrimination; Credit Officers; Incentives.;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:sol:wpaper:09-017. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/cebulbe.html .

    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.