IDEAS home Printed from
   My bibliography  Save this article

Developmental Impact and Coexistence of Sustainable and Charitable Microfinance Institutions: Analysing BancoSol and Grameen Bank


  • Jessica Schicks


Based on the current discussion of the development of a commercial market segment of Microfinance Institutions (MFIs), this paper evaluates the developmental impact of charitable MFIs that rely on subsidies in comparison with sustainable MFIs that operate independently from grant funding. BancoSol from Bolivia serves as a case study of a sustainable MFI. Grameen Bank from Bangladesh represents a charitable MFI. The case studies confirm both the theoretical arguments for sustainable MFIs promoted by the institutionist approach to microfinance and the arguments for charitable MFIs advocated by the welfarist approach. The paper argues that both kinds of MFIs are justified and should continue to coexist. The second part of the paper suggests institutional solutions to facilitate the coexistence of both types of MFIs. Cet article repose sur le débat actuel portant sur le développement d'un segment de marché commercial des institutions de microfinances (IMF). Il évalue les impacts respectifs sur le développement des IMF qui dépendent de subventions et de celles qui en sont indépendantes. La Bancosol de Bolivie représente un exemple d'IMF durable (sustainable MFI) et la Grameen bank du Bangladesh un exemple d'IMF caritative (charitable MFI). Les études de cas confirment à la fois les arguments théoriques, sur les IMF durables appuyés par l'approche 'institutionniste' et les arguments sur les IMF caritatives appuyés par l'approche en termes d'Etat providence. L'article justifie les deux types d'IMF et la nécessité de leur coexistence. La seconde partie de l'article suggère des solutions institutionnelles destinées à faciliter la coexistence de ces deux types d'IMF.

Suggested Citation

  • Jessica Schicks, 2007. "Developmental Impact and Coexistence of Sustainable and Charitable Microfinance Institutions: Analysing BancoSol and Grameen Bank," The European Journal of Development Research, Taylor and Francis Journals, vol. 19(4), pages 551-568.
  • Handle: RePEc:taf:eurjdr:v:19:y:2007:i:4:p:551-568
    DOI: 10.1080/09578810701667573

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


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

    Cited by:

    1. Sheremenko, Ganna & Escalante, Cesar L. & Florkowski, Wojciech J., 2012. "The Universality of Microfinance Operations Model in Eastern Europe and Central Asia: Financial Sustainability vs. Poverty Outreach," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123286, Agricultural and Applied Economics Association.
    2. Ganna Sheremenko & Cesar L Escalante & Wojciech J Florkowski, 2017. "Financial Sustainability and Poverty Outreach: The Case of Microfinance Institutions in Eastern Europe and Central Asia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 230-245, January.
    3. Sheremenko, Ganna & Escalante, Cesar L. & Florkowski, Wojciech J., 2012. "The Road to Financial Sustainability. Comparative Analysis of Russia and the Caucasus Region," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119525, Southern Agricultural Economics Association.
    4. Baldi, Guido & Sadovskis, Vairis & Šipilova, Viktorija, 2014. "Economic and Employment Effects of Microloans in a Transition Country," MPRA Paper 52736, University Library of Munich, Germany.
    5. JJ. Cao-Alvira & LG Deidda, 2013. "Financial liberalization and the development of microcredit," Working Paper CRENoS 201324, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eurjdr:v:19:y:2007:i:4:p:551-568. 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: (Chris Longhurst). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.