IDEAS home Printed from https://ideas.repec.org/p/fpr/fcnddp/89.html
   My bibliography  Save this paper

The role of the state in promoting microfinance institutions

Author

Listed:
  • Lapenu, Cécile

Abstract

In a context of liberalized financial systems, microfinance allows millions of households, usually excluded from classical financial services, to begin or reinforce their own activities and become microentrepreneurs. Yet, in spite of the success of numerous microfinance institutions (MFI), many difficulties remain which must be urgently resolved in view of their ambitious objectives. First, a large number of the rural households still lack access to financial services. Second, most of the existing MFI are not yet financially sustainable. Finally, while funds from governments and donors are rapidly increasing, financial institutions still need solid foundations to avoid management failures. These issues raise questions of the role of the state to promote MFI including (1) which state-owned institutions may be necessary? (2) which level and type of subsidization of the financial institutions can be accepted? (3) what can be the choice for the state between alternative investments in financial institutions or complementary services? (4) what are the necessary conditions for creating a favorable environment? This paper presents the evolution of views on the role of the state in the financial system including theoretical and empirical points of view from the interventionist period of the 1960s and 1970s to the current period of liberalization. Based on country case studies illustrating the divergent role of the state in the development of the rural financial system, the paper reviews the respective role of the state, the NGO and the private commercial banks in increasing their outreach and in adopting microfinance innovations. It also analyzes different issues regarding regulation of MFI.

Suggested Citation

  • Lapenu, Cécile, 2000. "The role of the state in promoting microfinance institutions," FCND discussion papers 89, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:fcnddp:89
    as

    Download full text from publisher

    File URL: http://www.ifpri.org/sites/default/files/publications/fcndp89.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Assaad, Ragu & El-Hamidi, Fatma & Ahmed, Akhter U., 2000. "The determinants of employment status in Egypt," FCND discussion papers 88, International Food Policy Research Institute (IFPRI).
    2. Fatma El-Hamidi & Ragui Assaad & Ahmed Akhter, 2000. "The Determinants of Employment Status in Egypt," Working Paper 269, Department of Economics, University of Pittsburgh, revised Sep 2006.
    3. Zeller, Manfred & Schrieder, Gertrud & von Braun, Joachim & Heidhues, Franz, 1997. "Rural finance for food security for the poor," Food policy reviews 4, International Food Policy Research Institute (IFPRI).
    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


    Cited by:

    1. Hudon, Marek & Traca, Daniel, 2011. "On the Efficiency Effects of Subsidies in Microfinance: An Empirical Inquiry," World Development, Elsevier, vol. 39(6), pages 966-973, June.
    2. Maziya, Sikhanyiso Angel, 2019. "The impact of the Europeun Union grant on access to credit and production in smallholder sugarcane agriculture in Siphofaneni, Eswatini," Research Theses 334775, Collaborative Masters Program in Agricultural and Applied Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kirimi, Lilian & Sindi, Kirimi, 2006. "A Duration Analysis of Poverty Transitions in Rural Kenya," 2006 Annual meeting, July 23-26, Long Beach, CA 21475, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Haddad, Lawrence James & Ahmed, Akhter U., 2002. "Avoiding chronic and transitory poverty," FCND briefs 133, International Food Policy Research Institute (IFPRI).
    3. Dufhues, T. & Buchenrieder, G., 2004. "Der Beitrag der Conjoint Analyse zur nachfrageorintierten Entwicklung des ländlichen Finanzsektors in Vietnam," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 39.
    4. Renata Baborska & Emilio Hernandez & Emiliano Magrini & Cristian Morales-Opazo, 2020. "The impact of financial inclusion on rural food security experience: A perspective from low-and middle-income countries," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 10(2), pages 1-18.
    5. Allen Blackman, 2001. "Why don't Lenders Finance High-Return Technological Change in Developing-Country Agriculture?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 1024-1035.
    6. Nordjo, R. & Adjasi, C., 2018. "The Impact of Finance on Welfare of Smallholder Farm Household in Ghana," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277142, International Association of Agricultural Economists.
    7. Basu, Karna & Wong, Maisy, 2015. "Evaluating seasonal food storage and credit programs in east Indonesia," Journal of Development Economics, Elsevier, vol. 115(C), pages 200-216.
    8. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, January.
    9. De Janvry, Alain & Sadoulet, Elisabeth & Murgai, Rinku, 2002. "Rural development and rural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 31, pages 1593-1658, Elsevier.
    10. Richard L Meyer, 2009. "Track Record of Financial Institutions in Assisting the Poor in Asia," Working Papers id:2284, eSocialSciences.
    11. Machiko Nissanke, 2002. "Donors' Support for Microcredit as Social Enterprise: A Critical Reappraisal," WIDER Working Paper Series DP2002-127, World Institute for Development Economic Research (UNU-WIDER).
    12. Imelda Flores Vazquez, 2014. "Equilibrium unemployment in the presence of different skill levels in two different regions: Mexico versus Egypt," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 121-131, October.
    13. Somaya Ahmed Aly Abdel-Mowla, 2012. "Females’ Off-the-Job Search Methods in Egypt: Formal versus Informal Search Methods," Jindal Journal of Business Research, , vol. 1(1), pages 21-42, June.
    14. 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 11, International Food Policy Research Institute (IFPRI).
    15. Løvendal, Christian Romer & Knowles, Marco, 2005. "Tomorrow's hunger: a framework for analysing vulnerability to food insecurity," ESA Working Papers 289071, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    16. Nazier, Hanan & Ezzat, Asmaa, 2022. "Gender differences and time allocation: A comparative analysis of Egypt and Tunisia," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 174-193.
    17. Zeller, Manfred & Meyer, Richard L. (ed.), 2002. "The triangle of microfinance: Financial sustainability, outreach, and impact," IFPRI books, International Food Policy Research Institute (IFPRI), number 0-8018-7148-4.
    18. Nazier, Hanan, 2020. "Female labor in Egyptian manufacturing sector: The demand side story," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 1-11.
    19. Zeller, Manfred & Sharma, Manohar, 2000. "Many borrow, more save, and all insure: implications for food and micro-finance policy," Food Policy, Elsevier, vol. 25(2), pages 143-167, April.
    20. Hanan Nazier, 2019. "Estimating Labor Demand Elasticities and Elasticities of Substitution in Egyptian Manufacturing Sector: A Firm-Level Static Analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(4), pages 549-575, December.

    Corrections

    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:fpr:fcnddp:89. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.