We demonstrate that subsidy uncertainty in microfinance can lead to mission drift and defeat poverty alleviation efforts. Our model shows that microfinance institutions, fearing that subsidies may dry up, have no alternative but to build precautionary savings by serving wealthier clients,...

This paper is the first to draw a global picture of worldwide microfinance equity by taking full advantage of daily quoted prices. We revisit previous findings showing that investors should consider microfinance as a self-standing sector. Our results are threefold. First, microfinance has become...

Recent evidence shows that the poor desperately need access to savings products. But despite this general consensus, microfinance institutions (MFIs) offering savings products are still under-studied. Using random-effect probit estimation on a dataset of 722 MFIs active over the 2005-2010...

This paper is the first to draw a global picture of worldwide microfinance equity by taking full advantage of daily quoted prices. We revisit previous findings showing that investors should consider microfinance as a self-standing sector. Our results are threefold. First, microfinance has become...

Using data from Bangladesh, this paper finds that the liquidity premium—the difference between the interest paid on illiquid and liquid savings accounts—is higher in commercial banks than in microfinance institutions. One possible interpretation lies in the higher prevalence of...

The microfinance movement reached developed countries in the late 1980s and it is still a niche market. This chapter starts with a brief history of microfinance in the North. Next, it develops a supply-side perspective and pays special attention to the features of developed countries that shape...

The costs and benefits of subsidized microfinance are still a controversial topic. We evaluate how subsidies affect the cost-efficiency of microfinance institutions (MFIs). At the same time, we account for endogenous self-selection into the business models of credit-only versus...

In most developed countries, regulators have imposed loan-size ceilings to subsidized microfinance institutions (MFIs). Entrepreneurs holding above-ceiling projects then need to secure partial funding by a bank before applying for microcredit. In turn, the MFI is tempted to free ride on bank...

In microcredit institutions, credit officers play a prominent role in loan granting decisions. Indeed, they collect field data, meet with the applicants, and provide personal recommendations to the credit committee that takes the final decisions (loan approval/denial, and loan size). This paper...

This paper compares the loans granted to male and female entrepreneurs by a French microfinance institution (MFI). The sample period is split in two: before and after the MFI implemented France's regulatory EUR 10,000 loan ceiling. In the first period, the MFI does not co-finance projects with...