IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/16123.html
   My bibliography  Save this paper

Handling Default Risks in Microfinance: The Case of Bangladesh

Author

Listed:
  • Kassim, Salina
  • Rahman, Md Mahfuzur

Abstract

Despite the current enthusiasms in applying the concept of microfinance as a poverty alleviation tool in many countries, the risk management aspects of microfinancing should not be overlooked. This paper highlights several incidences of default risks in microfinance and subsequently, provides a comprehensive exploratory study on the various ways to handle the default risks in microfinance. While there are social and religious objectives embedded in extending microfinancing, fact is that the financiers are business entities having the objectives of maximizing returns and minimizing losses. In this regard, this paper contributes towards a more effective recovery process, so that more people can benefit from the microfinancing facilities. Several suggestions are highlighted to maximize the benefits of microfinance to both the creditors and borrowers with the objective of realizing a win-win situation for both parties.

Suggested Citation

  • Kassim, Salina & Rahman, Md Mahfuzur, 2008. "Handling Default Risks in Microfinance: The Case of Bangladesh," MPRA Paper 16123, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16123
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/16123/1/MPRA_paper_16123.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, vol. 60(1), pages 27-50, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Microfinance; default risks; recovery process; Bangladesh;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

    Statistics

    Access and download statistics

    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:pra:mprapa:16123. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 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.

    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.