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Do Microloan Officers Want to Lend to the Less Advantaged? Evidence from a Choice Experiment

  • Sagamba, Moïse

    ()

    (Université Lumiére de Bujumbura and Université de Bretagne Occidentale)

  • Shchetinin, Oleg

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Yusupov, Nurmukhammad

    ()

    (Chaire Banque Populaire, Audencia Nantes School of Management)

The mission of microfinance is generally perceived as compensation for the failure of the mainstream financial institutions to deliver access to finance to the poor. Microloan officers have significant influence on microloans allocation as they contact loan applicants and process information inside microfinance institutions (MFIs). We conduct a choice experiment with microloan officers in Burundi to determine which clients are preferred for microloan allocation and whether the less advantaged are indeed targeted. The results suggest that the allocation of microloans is slightly in favor of the less advantaged, whereas the main determinant is the quality of the applicants' business projects. Somewhat surprisingly, we find only small differences in the determinants of the targeted groups between non-profit and profit-seeking MFIs.

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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 492.

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Length: 42 pages
Date of creation: 28 Feb 2011
Date of revision:
Handle: RePEc:hhs:gunwpe:0492
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