Financial performance and Outreach

A Global Analysis of Leading Microbanks

Datos Bibliográficos

ID9708833
AutoresRobert Cull (World Bank), Asli Demirgu¨ç‐Kunt (World Bank), Asli Demirgu ̈ç‐Kunt, Jonathan Morduch (0000-0002-1837-9579, New York University)
Año2007
Volumen117
Número517
PáginasF107-F133
Fecha de publicación2007-02-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2007.02017.x
OpenAlexW1974989013
IdiomaEN
Citas recibidas114
Referencias citadas15

Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007

Business · Economic growth · Economics · Financial system · Outreach · Finance · FinTech, Crowdfunding, Digital Finance · Islamic Finance and Banking Studies · Microfinance and Financial Inclusion