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Author: | Cull, R. Demirguc-Kunt, A. Morduch, J. |
Title: | Financial performance and outreach: a global analysis of leading microbanks |
Journal: | Economic Journal
2007 : FEB, VOL. 117:517, p. F107-F133 |
Index terms: | bank lending banks financial performance loans profitability |
Freeterms: | microfinance |
Language: | eng |
Abstract: | The promise of microfinance is to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates, but, so far, relatively few earn profits. This study examines why this promise remains unmet. Patterns of profitability, loan repayment, and cost reduction are explored with unusually high-quality data on 124 institutions in 49 countries. The results show the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. |
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