Journal ArticleDOI
The Definition and Causes of Microfinance Over-Indebtedness: A Customer Protection Point of View
TLDR
In this paper, a framework for the causes of over-indebtedness in micro-finance is presented, which highlights the role of external influences and the responsibility of lenders, as well as the role borrowers play in their own over-debt.Abstract:
With over-indebtedness emerging among microfinance customers, the industry's sustainability and social impact are at risk. Filling a void in the literature, this paper develops a definition of over-indebtedness that is appropriate for customer protection purposes. It provides a framework for the causes of over-indebtedness that highlights the role of external influences and the responsibility of lenders. It recognises the role borrowers play in their own over-indebtedness. This paper challenges several misconceptions and oversimplifications about microfinance over-indebtedness. These include the belief that default-based risk management indicators are sufficient to signal concerns in relation to customer protection. Further misconceptions are the undesirability of consumption loans, as well as the benefits of competition, of regular instalment schedules, of a zero-tolerance policy and of annual percentage rates. By enhancing our understanding of microfinance over-indebtedness and its causes, this paper pr...read more
Citations
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Micro-credit initiatives for equitable and sustainable development : who pays?; a case study of the Grameen Bank Program in rural Bangladesh
TL;DR: In this paper, anthropological research on the micro-credit program of the Grameen Bank shows that bank workers are expected to increase disbursement of loans among their members and press for high recovery rates to earn profit necessary for economic viability of the institution.
Journal ArticleDOI
Portfolios of the Poor: How the World's Poor Live on $2 a Day
TL;DR: Collins, Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven as discussed by the authors described portfolios of the poor: How the World's Poor Live on $2 a Day.
Posted Content
Should Access to Credit be a Right
TL;DR: In this article, the authors explore the ethical dimensions surrounding the concept of a human right to credit and propose a new perspective on the question of access to credit based on a goal-right system.
Journal ArticleDOI
The Impact of Governance and Institutional Quality on MFI Outreach and Financial Performance in Sub-Saharan Africa
TL;DR: In this paper, the role of institutional quality in altering MFIs' incentives and behavior in determining outreach was investigated and the results indicated that NGOs are more profitable and have better outreach than banks and cooperatives.
References
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Posted Content
Choices, Values, and Frames
Daniel Kahneman,Amos Tversky +1 more
TL;DR: Prospect theory as mentioned in this paper is an alternative to the classical utility theory of choice, and has been used to explain many complex, real-world puzzles, such as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days.
Book
Choices, Values, and Frames
Daniel Kahneman,Amos Tversky +1 more
TL;DR: In this paper, the cognitive and psychophysical determinants of choice in risky and risk- less contexts are discussed, and the relation between decision values and experience values is discussed, as well as an approach to risky choice that sketches an approach for decision making that can be seen as the acceptance of a gamble that can yield various outcomes with different probabilities.
Journal ArticleDOI
Golden Eggs and Hyperbolic Discounting
TL;DR: The authors analyzes the decisions of a hyperbolic consumer who has access to an imperfect commitment technology: an illiquid asset whose sale must be initiated one period before the sale proceeds are received.
Journal ArticleDOI
Mental Accounting and Consumer Choice
TL;DR: It’s time to get used to the idea that there is no such thing as a “right answer” to everything.
Book ChapterDOI
Myopia and Inconsistency in Dynamic Utility Maximization
TL;DR: In this article, the authors present a problem which has not heretofore been analysed and provide a theory to explain, under different circumstances, three related phenomena: (1) spendthriftiness; (2) the deliberate regimenting of one's future economic behaviour, even at a cost; and (3) thrift.