Microfinance
Battling a Wicked Problem
Summary
Poverty is a wicked problem, akin to Hydra, the Greek mythological monster with many heads. As microcredit tries to balance multiple objectives to grapple with these multiple heads, it has needed to shift the weapons it uses. The arsenal for this battle has needed new philosophies, changing ethics, differing missions, institutional partnerships, the latest technologies and new products. These rapid innovations have differed in speed across the world, with adaptations in developed and developing countries. This book presents these with many case studies and field research.
It is clear that development initiatives, no matter how financial, cross academic disciplines. At the very least, they affect disciplines such as economics, business management, sociology, history, geography, politics, legal systems in place, as well as science, which is evolving at such a high speed. The book provides this multidisciplinary view and motivates future research and practices.
Excerpt
Table Of Contents
- Cover
- Title
- Copyright
- About the author(s)/editor(s)
- About the book
- This eBook can be cited
- Foreword. The Controversial Universe of Microfinance
- Preface. A Journey into Microfinance
- Contents
- List of Figures
- List of Tables
- List of Acronyms used
- Chapter 1. Microcredit as a Response to a Wicked Problem
- Responsibility for Wicked Problems
- The Wickedness of the Sustainable Development Problem
- The Origins and Evolution of Corporate Social Responsibility
- Alternatives for Helping the Poor
- Microcredit: An Instrument to Address a Wicked Problem
- Why People Did Not Lend to the Poor
- How Microcredit Solved the Problems
- Is Microcredit a Social Innovation?
- The Evolution of Microcredit
- The Spread of Microcredit
- The Transformation of Microcredit
- The Achilles’ Heel of Microcredit
- Outline of the Book
- Chapter 2. Institutional Study of Microcredit: Successes and Failures
- What Made Microcredit Successful?
- Regional Analysis
- Industry Analysis
- Organizational Analysis
- Unsustainable Growth of Microcredit
- The Impact of Financial Crisis on Microcredit
- Ethical Crisis within Microcredit Organizations
- Life Crisis among Microcredit Beneficiaries
- Enabling Institutions to Protect Microcredit
- Usury Legislation
- Transparency
- Religion
- Concluding Remarks
- Chapter 3. Innovations to Make Microcredit a more Powerful Tool
- MIS to Control Operating Costs and Increase Outreach
- MIS Packages and Cross-Purposes Problem
- Free and Open Source Software (FOSS)
- SaaS for Microfinance
- Crowdfunding to Lower Financing Costs and Increase Financing
- Understanding the Peer to Peer Lending Space
- The Role of Trust in Online Funding
- Socio-Ethics as a Barrier to Innovation
- Process Innovations Concerning Risk, Outreach and Impact
- Financial and Time Use Diaries
- Credit Scoring to Reduce Risk and Mission Drift
- Poverty Scoring to Reduce Mission Drift
- Concluding Remarks
- Chapter 4. Other Micro Products and Services to Attack the Problem
- Reducing Stress through Equity
- Microangel Investment Process
- Microequity Movement
- Slow Money and Impact Investments
- Levelling Wicked Problems Through Wages, Insurance and Savings
- Minimum Wage Solution
- Innovating Microinsurance
- Influencing Microsavings Behavior
- Building Entrepreneurial Capacity with Complementary Institutions
- Capacity Building with Microcredit
- Innovative Cooperatives of Entrepreneurs
- What Capacity for the Future
- Concluding Remarks on Motivation for Research
- References
- Index
- Series index
Figure 1.1: Sustainable Development
Figure 1.2: Poverty focused view of Social Responsibility
Figure 1.3: Evolution of Microfinance Research
Figure 1.4: Why the poor did not receive loans
Figure 1.5: Why MFIs are able to lend
Figure 1.6: Microfinance Stakeholders
Figure 1.7: The evolution of microfinance
Figure 1.8: Composition of MFIs by legal status
Figure 1.9: Outreach by legal status of MFI
Figure 1.10: Evolution of average loan size by region
Figure 1.11: Average Loan Size by legal status
Figure 1.12: Average loan size as percentage of GNI
Figure 2.1: Panorama of Microfinance Industry in Togo
Figure 2.2: Microcredit outreach in India by legal status
Figure 2.3: Microcredit Outreach in Bangladesh by MFI
Figure 2.4: Evolution of Value of Compartamos
Figure 2.5: Stakeholders of Compartamos
Figure 2.6: Power versus Interest Grid of Compartamos’ Stakeholders
Figure 2.7: Usury ceilings create rationing
Figure 3.1: Break-down of Total income as a percentage of Assets
Figure 3.2: Mapping innovation
Figure 3.3: Impact of technological innovation on costs
Figure 3.4: Technological innovations and costs in the Supply chain of microfinance
Figure 3.5: Business Model Gap in the software market for microfinance ← 21 | 22 →
Figure 3.6: The long tail of MFIs
Figure 3.7: The value proposition of SaaS and Clouds
Figure 3.8: SaaS fills up the Business Model Gap
Figure 3.9: Web 2.0 innovation map
Figure 3.10: Models of online lending
Figure 3.11: Forms of communication
Figure 3.12: A modified Household Economic Portfolio Model
Figure 3.13: Development, loss aversion and mobile banking regulation
Figure 4.1: The microangel clubs
Figure 4.2: Evolution of the microangel clubs
Figure 4.3: How Index Insurance works
Figure 4.4: The saturation triangle
Figure 4.5: The Livelihood triad of Basix
Figure 4.6: Some tools to alleviate poverty
Table 1.1: Social Innovation characteristics of Microcredit
Table 1.2: Regional distribution of microcredit
Table 1.3: Return on Assets in the Microfinance industry
Table 1.4: Loan loss rate in microcredit
Table 1.5: Example of Effective Interest Rates depending on payment terms
Table 1.6: Evolution of the Yield of MFIs
Table 2.1: Some salient Institutional Features of North African countries
Table 2.2: Evolution of Microcredit in Morocco, Egypt and Tunisia
Table 2.3: Correlation between World Bank Governance Indicators and microcredit outreach in WAEMU
Table 2.4: Financial Analysis of top three MFIs in Bangladesh
Table 2.5: Microfinance Risks
Table 2.6: Cost and profit components of interest rates for the median MFI, Compartamos and SKS
Table 2.7: Comparison of adjustments to be made in calculations of interest rates in different countries
Table 3.1: Market capitalization of a few High Technology firms
Table 3.2: Evolution of average loan size
Table 3.3: Evolution of MFIs by size
Table 3.4: Poverty and Credit Risk
Table 4.1: Profiles of French microangels
Table 4.2: Comparison of Investor Profiles
Table 4.3: Comparison of Project Profile ← 23 | 24 →
Table 4.4: Per capita Income in the ten poorest countries
Table 4.5: Savings and Development indicators
Table 4.6: Capacity Building Programs run by SKDRDP
Table 4.7: The Four laws of Future Studies
AFC Average Fixed Cost
AMT African Microfinance Transparence
APIM Association Professionnelle des Institutions de Microfinance
APR Annual Percentage Rate
ATC Average Total Cost
ATMs Automated Teller Machines
BCEAO Banque Centrale des Etats de l’Afrique de l’Ouest
CAE Coopérative d’Activité et Emploi
CGAP Consultancy Group to Assist the Poor
CEO Chief Executive Officer
CERMi Centre for European Research in Microfinance
CIGALES Club d’Investisseurs pour une Gestion Alternative et Locale de l’Epargne Solidaire
CNRS Centre National de la Recherche Scientifique
CSFI Centre for the Study of Financial Innovation
Details
- Pages
- 228
- Publication Year
- 2016
- ISBN (PDF)
- 9782807600928
- ISBN (ePUB)
- 9782807600935
- ISBN (MOBI)
- 9782807600942
- ISBN (Softcover)
- 9782807600911
- DOI
- 10.3726/b10494
- Language
- English
- Publication date
- 2016 (October)
- Published
- Bruxelles, Bern, Berlin, Frankfurt am Main, New York, Oxford, Wien, 2016. 228 pp.
- Product Safety
- Peter Lang Group AG
