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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 d�bat actuel portant sur le d�veloppement d'un segment de march� commercial des institutions de microfinances (IMF). Il �value les impacts respectifs sur le d�veloppement des IMF qui d�pendent de subventions et de celles qui en sont ind�pendantes. La Bancosol de Bolivie repr�sente un exemple d'IMF durable (sustainable MFI) et la Grameen bank du Bangladesh un exemple d'IMF caritative (charitable MFI). Les �tudes de cas confirment � la fois les arguments th�oriques, sur les IMF durables appuy�s par l'approche 'institutionniste' et les arguments sur les IMF caritatives appuy�s par l'approche en termes d'Etat providence. L'article justifie les deux types d'IMF et la n�cessit� de leur coexistence. La seconde partie de l'article sugg�re des solutions institutionnelles destin�es � faciliter la coexistence de ces deux types d'IMF.

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Article provided by Taylor and Francis Journals in its journal The European Journal of Development Research.

Volume (Year): 19 (2007)
Issue (Month): 4 ()
Pages: 551-568

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Handle: RePEc:taf:eurjdr:v:19:y:2007:i:4:p:551-568
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