Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Microfinance Promise

Contents:

Author Info

  • Jonathan Morduch

Abstract

In the past decade, microfinance programs have demonstrated that it is possible to lend to low-income households while maintaining high repayment rates--even without requiring collateral. The programs promise a revolution in approaches to alleviating poverty and spreading financial services, and millions of poor households are served globally. A growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success--particularly the use of group-lending contracts with joint liability. For the most part, however, high repayment rates have not translated into profits, and studies of impacts on poverty yield a mixed picture. In describing emerging tensions, the paper highlights the diversity of innovative mechanisms beyond group-lending contracts, the measurement of financial sustainability, the estimation of economic and social impacts, the costs and benefits of subsidization, and the potential to reduce poverty through savings programs rather than just credit. The promise of microfinance has pushed far ahead of the evidence, and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jel.37.4.1569
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 37 (1999)
Issue (Month): 4 (December)
Pages: 1569-1614

as in new window
Handle: RePEc:aea:jeclit:v:37:y:1999:i:4:p:1569-1614

Note: DOI: 10.1257/jel.37.4.1569
Contact details of provider:
Email:
Web page: https://www.aeaweb.org/journal
More information through EDIRC

Order Information:
Web: https://www.aeaweb.org/subscribe.html

Related research

Keywords:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robert J. LaLonde, 1995. "The Promise of Public Sector-Sponsored Training Programs," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(2), pages 149-168, Spring.
  2. Gabriel Fuentes, 1996. "The use of village agents in rural credit delivery," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(2), pages 188-209.
  3. Mark Pin & Shahidur Khandker & Signe-Mary Mckernan & M. Latif, 1999. "Credit programs for the poor and reproductive behavior in low-income countries: Are the reported causal relationships the result of heterogeneity bias?," Demography, Springer, Springer, vol. 36(1), pages 1-21, February.
  4. Bolnick, Bruce R., 1988. "Evaluating loan collection performance: An Indonesian example," World Development, Elsevier, Elsevier, vol. 16(4), pages 501-510, April.
  5. Zeller, Manfred & Ahmed, Akhter U. & Babu, Suresh Chandra & Broca, Sumiter S. & Diagne, Aliou & Sharma, Manohar, 1996. "Rural finance policies for food security of the poor," FCND discussion papers, International Food Policy Research Institute (IFPRI) 11, International Food Policy Research Institute (IFPRI).
  6. Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers, Harvard - Institute for International Development 512, Harvard - Institute for International Development.
  7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, American Economic Association, vol. 71(3), pages 393-410, June.
  8. Hoff, Karla & Stiglitz, Joseph E., 1998. "Moneylenders and bankers: price-increasing subsidies in a monopolistically competitive market," Journal of Development Economics, Elsevier, Elsevier, vol. 55(2), pages 485-518, April.
  9. Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, Elsevier, vol. 60(1), pages 27-50, October.
  10. Bose, Pinaki, 1998. "Formal-informal sector interaction in rural credit markets," Journal of Development Economics, Elsevier, Elsevier, vol. 56(2), pages 265-280, August.
  11. Hollis, Aidan & Sweetman, Arthur, 1998. "Microcredit: What can we learn from the past?," World Development, Elsevier, Elsevier, vol. 26(10), pages 1875-1891, October.
  12. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, July.
  13. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198288244, October.
  14. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(2), pages 85-110, Spring.
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. The Microfinance Promise (JEL 1999) in ReplicationWiki

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:aea:jeclit:v:37:y:1999:i:4:p:1569-1614. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.