Microcredit : What Can We Learn from the Past?

We compare six microcredit organizations of nineteenth-century Europe (credit cooperatives and loan funds) to identify what characteristics were related with successful attainment of the organization's goals. We find that organizations that depended on charity or government for their funding tended not to be sustainable. In contrast, those organizations which relied on depositors for their funding operated at a larger scale and lasted much longer. An examination of the characteristics of these historical institutions is useful because some of them operated over many decades, providing a perspective which is rarely seen in modern, short-lived microcredit banks and programs