Microfinance vs. traditional banking in developing countries

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

This paper describes some of the main aspects of microfinance (MF) in under-developed countries, showing why it has succeeded in reaching the poor, while traditional banks have not, using innovative devices such as group lending with self-monitoring, short repayments instalments and small loans. The aim of the paper is to show how microfinance institutions (MFIs) can fill the lack of traditional banks in under-developed countries, proposing unconventional products and innovative business models. This study also investigates about possible synergies between banks and MFIs, avoiding overlaps and mission drift. It is shown that MFIs can improve their outreach using technological devices such as M-banking. Innovative questions and proposals are illustrated, so as to give an updated and synthetic picture of the state-of-the-art, which might prove useful for researchers and practitioners.
Lingua originaleEnglish
pagine (da-a)43-61
Numero di pagine19
RivistaINTERNATIONAL JOURNAL OF FINANCIAL INNOVATION IN BANKING
Stato di pubblicazionePubblicato - 2016

Keywords

  • NGO
  • adverse selection
  • corporate governance
  • group lending
  • lending innovations
  • m-banking
  • microcredit
  • microdeposits
  • microinsurance
  • moral hazard
  • outreach
  • poverty alleviation
  • sustainability
  • technology

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