Showing papers on "Microfinance published in 1995"

Maximizing the outreach of microenterprise finance : the emerging lessons of successful programs

Abstract: The conventional view has held that microenterprise finance helps poor people and therefore is a desirable development activity but that it cannot be financial viable. Small loans, it is said, are simply too costly to administer, and the profits from such lending too meager to permit profitability. However, a study examining some of the best microfinance institutions concludes that this conventional wisdom is quite wrong. Microfinance institutions can and indeed need to be self-sustaining if they are to achieve their outreach potential providing rapid growth in access to financial services by poor people. This study looks at recent developments in microenterprises finance from two perspectives, outreach and financial sustainability. The performance of 11 microenterprises finance programs was examined in the study.

State-Owned Agricultural Development Banks: Lessons and Opportunities for Microfinance

Abstract: ..................................................... . I. Microfmance: Achievements and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . 1 Elements of a New Consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 2 Financial Services Matter ....................................... 3 Value and Shortcomings of Informal Finance .......................... 4 Credit Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Government Intervention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 New Vision and Practice in Microfinance ............................ 6 Variety of Best Practice Experiences ............................... 7 Organizational Design ......................................... 8 Second-best Options .......................................... 9 II. State-owned Agricultural Development Banks ....................... 10 Key Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Focus on Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Monitoring Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Market Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Repressive Policies .......................................... 14 Development Orientation ...................................... 14 Bank Charter .............................................. 15 State Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Lack of Viability ........................................... 18 Borrower Domination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Deposit Mobilization ......................................... 20 Disappointing Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 III. Development Banks and Microfinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Role of State-owned Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Reasons for Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Information and Human Capital .................................. 23 Valuable "Lost" Clientele ..................................... 24 Preconditions for Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 The Ideal Type Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Expected outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Microfinance .............................................. 30 IV. Lessons from Development Bank Histories . . . . . . . . . . . . . . . . . . . . . . . . . 31 Latin America and Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Africa .................................................. 32 V. Concluding Speculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

The Paradigm Shift in Microfinance: A perspective from HIID

Abstract: This paper, which was presented at the HIID History Conference held in Bermuda in March 1995, analyzes HIID's role in the development of sustainable microfinance. The paper is about the history of an idea that the massive demand for microfinance in developing countries can be supplied by sustainable institutions providing financial services commercially, and that these services can have important effects on social and economic &p development. This has now been well demonstrated on a large scale. We discuss here HIID's role in the formulation of the initial hypotheses and HIID's contributions in planning and coordinating the underlying research, advising on the policies and implementation strategies that put concept into practice, analyzing the results, and disseminating the findings. Drawing on work in Asia, Africa, and Latin America, the paper analyzes the paradigm shift in microfinance from government and donor-funded subsidized credit to sustainable financial intermediation. This shift has occurred because of the work of many people in many countries. This paper, however, is limited to HIID's contribution. The policy implications of the 'new microfinance' for governments, donors, banks, and NGOs are explored. Marguerite Robinson, an Institute Fellow at HIID, holds a Ph.D. in Anthropology from Harvard University. Working for the Indonesian Ministry of Finance, she advised BRI for over a decade on the development of its unit banking system. She is presently consulting for BRI and for financial institutions in other countries, helping to adapt lessons from BRI to local financial markets elsewhere.

A Bibliographical Survey of Rotating Savings and Credit Associations

Abstract: In many countries in Africa and Asia, rotating savings and credit associations (ROSCAs) underpin much of the economy. This survey covers the wide range of literature on these associations.

Social Finance Working Paper #9: Monitoring guidelines for semi-formal financial institutions active in small enterprise finance

Abstract: Deals with unregulated but legal financial entities operating in the semi-formal financial sector, essentially membership-based self-help organizations and outside assistance-based nongovernmental organizations. Provides a framework of questions and indicators to form the basis for a monitoring system in order to ensure a continuous supply of relevant information for determining the effectiveness and efficiency of financial services.

Credit unions as channels of micro-credit lines : The Philippine case

Abstract: One type of financial institution that has been increasingly used as credit conduit of these special credit programmes is the credit union system. Credit unions mobilize savings from and lend funds to their members. However, their resources may not be sufficient to satisfy the growing credit demands f their members. Credit unions confronted with this problem try to solve it by asking their members to line up for credit and by rationing credit. This could involve opportunity costs to those who wanted to have a certain amount of credit at a particular time. Access to additional external sources of funds could relax this resource constraint.

Les chainons manquants : des systemes financiers au service du plus grand nombre

Abstract: In April 1995, ninety leaders of finance ministries, central banks, financial institutions, international development agencies, and Women's World Banking (WWB) participated in the WWB Global Policy Forum in India, to build actions that would open financial systems to the world's poor majority. The purpose was to pull together public and private financial leaders with the power to transform local and global financial systems in ways that will open access to millions of low income entrepreneurs. During the Policy Forum, leaders arrived at consensus on the approaches and actions needed, and committed to moving the recommendations into practice.