Enabling environment and microfinance institutions: Lessons from Latin America

Cuevas, Carlos E.

doi:10.1002/(sici)1099-1328(199603)8:2<195::aid-jid376>3.0.co;2-l

Cited by 12 publications

(4 citation statements)

References 1 publication

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The regulators need to gain an in‐depth understanding of microfinance in practice (Siwale & Okoye, 2017) to depart from that of the banking sector, and also mobilize the necessary resources to enforce the regulations. Indeed, the fact that microfinance institutions employ methods and adopt governance and ownership structure in order to cater for their specific clientele distinguishes them from conventional commercial banks in ways that are relevant for a regulatory and supervisory standpoint (Cuevas, 1996). Requiring MFIs to comply with regulations that are similar to banks tends to make microfinance more of a business than a social venture.…”

Section: Resultsmentioning

confidence: 99%

The development of microfinance in Cameroon: Focus on regulation

Singhe¹,

Louche

2020

Strategic Change

View full text Add to dashboard Cite

While the microfinance regulations in Cameroon have a positive influence in professionalizing the microfinance sector, it seems to have also created hurdles for MFIs to fulfill their social mission of financial inclusion. The evolution of activities of the microfinance sector over the years led to changes in the regulatory environment through the establishment of new regulations that progressively professionalize the sector and controlled certain derives. Financial inclusion has been hindered by insufficient supervision and tight regulations in terms of board members' qualifications, loan documentation requirements, and provisioning and liquidity requirements. Regulations still need to reflect more the specificities of the microfinance sector and be matched with adequate supervision in order to achieve its dual role of financial inclusion and safeguarding the financial system. K E Y W O R D S cameroon, financial inclusion, microfinance regulation

show abstract

Section: Resultsmentioning

confidence: 99%

The development of microfinance in Cameroon: Focus on regulation

Singhe¹,

Louche

2020

Strategic Change

View full text Add to dashboard Cite

show abstract

“…The problem that the Bank and CGAP did see here was, as one Bank official observed in 1996, that despite the strong consensus among economists and practitioners behind the benefits of formalisationcum-commercialisation in terms of so-called 'outreach' and expansion, very few MFIs globally had actually chartered as banks. Other than BancoSol, Cuevas (1996) could locate only two other cases at some stage of formalisation, in Ecuador and in Mexico. While this slow progress might be attributed to potential trade-offs at institutional level to formalisation, these needed to be understood in relation to the wider 'enabling environment' provided by financial regulation.…”

Section: Regulating Markets Into Beingmentioning

confidence: 99%

A Critical History of Poverty Finance

Bernards¹

2022

View full text Add to dashboard Cite

“…The foundation for the promotion and development of microenterprises (PRODEM) with lending and training services was established in La Paz, Bolivia in 1986. PRODEM further decided to create COBANCO, a private commercial bank specialized in financial services to micro and small enterprises in 1990, which began operations as BancoSol in 1992 (Cuevas, 1996).…”

Section: Latin Americamentioning

confidence: 99%

Financial performance of microfinance institutions and outreach to the poor in South Asia

Anthikary¹

View full text Add to dashboard Cite

Over the years, microfinance institutions (MFIs) have been enjoying subsidies and donations from government and donors. However, donor funds and government subsidies are falling short as recent recession crippled the global economy. Thus, donor communities, microfinance practitioners, and government have recently started to promote self-financed MFIs in order to provide long-term financial solutions to the large pool of unbankable poor in a sustainable way.Falling government and donor funding is now followed by a drastic expansion of financially self-sustainable MFIs. This development has raised the concern as to whether the social goals of traditional microfinance would be equally well served in the new environment in as much as financial performance and outreach compete with each other. In the first part of the dissertation, we empirically examine this relation between financial performance and outreach of MFIs in a panel of South Asian countries from 2003 to 2009 using random effects model and general method of moments (GMM) estimation. We find that breadth and depth of outreach are positively associated to profitability and efficiency, and depth in contrast to breadth mitigates risks. Overall, our findings do not confirm a statistically significant negative relation between financial performance and outreach goals, suggesting that a financially sustainable microfinance expansion can achieve its social goals at an acceptable credit risk level. Transformation of subsidy and donation dependent MFIs into sustainable institutions requires private sector investment. Profitability then is vital not only to cover current expenses and internal funding but also to attract a durable flow of new private investment and ensure long-term financial sustainability and financial inclusion. It is therefore necessary to examine the factors that determine profitability vii conditions in microfinance in order to understand a full transformation process. Thus, this dissertation also empirically examines the impact of individual, industry and country specific factors on profitability of South Asian MFIs. An integrated model employing static and dynamic panel methods is used on a sample of 114 MFIs from 2003-2011. Results show that cost efficiency, strong capitalization, better liquidity, and industry concentration, all positively effect profitability, whereas credit risks scale it down. Lastly, macroeconomics factors do not seem to have an impact on profitability. These findings are robust to the various definitions of profitability and estimation methodologies. viii

show abstract

Enabling environment and microfinance institutions: Lessons from Latin America

Cited by 12 publications

References 1 publication

The development of microfinance in Cameroon: Focus on regulation

The development of microfinance in Cameroon: Focus on regulation

A Critical History of Poverty Finance

Financial performance of microfinance institutions and outreach to the poor in South Asia

Contact Info

Product

Resources

About