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Modalities of Microfinance Delivery in Asia and Latin America: Lessons for China

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  • Heather Montgomery
  • John Weiss

Abstract

Microfinance, the provision of small size loans and other financial services to low income households, is often seen as the key innovation of the last 25 years in terms of means of reaching out to the poor and vulnerable. There is extensive experience in microfinance provision in both Asia and Latin America, but as yet relatively little use of the approach in China. This paper assesses different approaches to microfinance delivery using a threefold distinction, the credit union approach, the non‐government organization approach and the banking approach, to generalize across recent Asian and Latin American experience and discuss the role of microfinance in poverty reduction in a theoretical framework. Considering the current state of microfinance in China and international experience, we suggest the banking approach as the way to best increase outreach of micro‐financial services in China. (Edited by Xiaoming Feng)

Suggested Citation

  • Heather Montgomery & John Weiss, 2006. "Modalities of Microfinance Delivery in Asia and Latin America: Lessons for China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(1), pages 30-43, February.
    • Handle: RePEc:bla:chinae:v:14:y:2006:i:1:p:30-43
    DOI: 10.1111/j.1749-124X.2006.00006.x
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    1. Marulanda, Beatriz & Trigo Loubière, Jacques & Cifuentes, Síncrito & Peck Christen, Robert & Westley, Glenn D. & Poyo, Jeffrey & Arbuckle, Lee & Heller, Carlos & Baker, Christopher & Vargas Durán, Ale, 2000. "Safe Money: Building Effective Credit Unions in Latin America," IDB Publications (Books), Inter-American Development Bank, number 433.
    2. Beatriz Marulanda & Jacques Trigo Loubière & Síncrito Cifuentes & Robert Peck Christen & Glenn D. Westley & Jeffrey Poyo & Lee Arbuckle & Carlos Heller & Christopher Baker & Alejandro Vargas Durán & D, 2000. "Safe Money: Building Effective Credit Unions in Latin America," IDB Publications (Books), Inter-American Development Bank, number 79523 edited by Glenn D. Westley & Brian Branch, February.
    3. Tsai, Kellee S., 2004. "Imperfect Substitutes: The Local Political Economy of Informal Finance and Microfinance in Rural China and India," World Development, Elsevier, vol. 32(9), pages 1487-1507, September.
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    Cited by:

    1. Adusei, Michael, 2019. "Board gender diversity and the technical efficiency of microfinance institutions: Does size matter?," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 393-411.
    2. Michael Adusei & Samuel Kofi Afrane, 2013. "The Impact Of Credit Union Financial Intermediation On Economic Growth: A Multi-Country Analysis," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(5), pages 71-78.
    3. Michael Adusei & Sarpong Appiah, 2012. "Evidence On The Impact Of The Susu Scheme In Ghana," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 6(2), pages 1-10.
    4. Wei Zhang & Haifeng Li & Shigenori Ishida & Eric Park, 2010. "China’s Non-governmental Microcredit Practice: History and Challenges," Journal of Family and Economic Issues, Springer, vol. 31(3), pages 280-296, September.
    5. Michael Adusei & Kwasi Poku & Samuel Akomea, 2023. "Manager bonding and the technical efficiency of cooperative credit unions‐parametric and non‐parametric analyses," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(4), pages 1085-1109, December.

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