Summary: Competition is claimed to be beneficial in development projects promoting micro and small enterprise finance although there are still some doubts whether these loans can be developed into a profitable business. Actually nothing is known about how many MSE banking units optimally should be created and supported in a certain region. Our research aims at shedding new light on this important issue in development finance. We employ a unique dataset from the Small Business Department of the European Bank for Reconstruction and Development for Kazakhstan, and investigate which strategy contributes more to the overall program?s success: a strategy of building up several competing banking units targeted at MSE lending or a strategy of establishing regional monopolies.
Questions? LIVE CHAT