Microfinance social performance: A global empirical study

Over the years, microfinance has been purported to have experienced enormous progress and is seen to contribute towards poverty reduction by extending finance to people previously excluded from formal financial markets. However, the question on how microfinance social performance is assessed remains unresolved. The paper develops an original social performance rating for 878 microfinance institutions (MFIs), across all geographic regions in the world for a period of 11 years (2000-2010). Furthermore, the paper investigates whether or not the age, assets, regulation status, loans per loan officers, as well as the profit status of MFIs affect MFIs’ ability to perform socially

Escape the low-growth trap? Microfinance in Tanzania

Tanzania is a small-sized economy, with a large portion of the population below the poverty line of $2 a day, particularly in rural areas. Finscope 2009, a national survey, provides evidence that 56% of the population has no access to financial services, a proportion that has slightly grown over the last few years. The main reasons given by respondents for not having loans, bank accounts or savings are practical obstacles (especially geographical distance), costs and lack of information – thereby suggesting that there is a large unmet demand for “accessible” financial services. Microfinance has endeavoured to address these needs, devising solutions to provide the poorer segments of the population with credit and – to a lesser extent – insurance, leasing and transfers. However, the Tanzanian microfinance market is still tiny, young, and dominated by a small number of major organisations; it is mostly active in Dar es Salaam and Arusha, with limited penetration in rural areas. What are, then, the barriers to its growth, and what steps can be taken to overcome them? Our study of microfinance in Tanzania, now at the end of its second year, addresses these concerns by widening its perspective, from case studies of individual microfinance institutions (MFIs) to the whole set of actors and stakeholders that operate in the field. More precisely, we adopt a network approach that places emphasis on the structure of inter-organisational partnerships that relate MFIs to relevant stakeholders, funders, and regulators; by so doing, we aim to bring to light systemic issues and to identify suitable policy responses

Strength of weak ties in microfinance

Executive briefing paper No. 7, which is an additional project report as part of the 'Optimising the Dual Goals of Microfinance' research being funded by the Leverhulme Trust. The report summarises up-to-date findings arising from the PhD research

Crisis in Indian microfinance and a way forward: governance reforms and the Tamil Nadu model

In recent months, microfinance practitioners worldwide have been holding their breath over events unfolding in India. Beginning in summer 2010 with controversies surrounding the IPO of SKS, a large microfinance institution (MFI) and a major player in the market, the crisis subsequently exacerbated in the state of Andhra Pradesh, with borrowers defaulting on payments and taking their lives. Echoed by the media, hostility to microfinance rose to unprecedented levels and some politicians even encouraged borrowers not to pay back their micro-loans. In fear of deterioration of MFIs’ financial solidity, numerous banks suspended flows of funds to them, leaving them severely cash-strapped. Yet until recently, Indian MFIs were widely praised for their contribution to the fight against poverty. By providing financial services to low-income clients, particularly women who would otherwise have limited or no access to them, microfinance has enabled them to develop small businesses and to reduce the volatility of their incomes. Even tiny loans have often been sufficient to empower the Indian poor. How, then, can the current turbulence be explained? Our study of microfinance in India, now at the end of its second year, addresses these concerns in a twofold way. First, it has extended from the study of a single, focal partner institution to a more global picture of the whole set of inter-organisational partnerships that relate MFIs to relevant stakeholders and regulators; as such, it is best positioned to bring to light systemic issues and to identify suitable policy responses. Second, our analysis focuses on the state of Tamil Nadu, geographically close to Andhra Pradesh and similar to it in terms of size and maturity of the microfinance market, but where the crisis has not spread. It thus enables to identify differences in the operations of MFIs in the two states which, despite a common landscape, may explain their differential capacity to achieve financial and social performance. On this basis, our analysis aims to contribute to the definition of a more sustainable model of microfinance, possibly to be extended to other parts of India

Outer-totalistic cellular automata on graphs

We present an intuitive formalism for implementing cellular automata on arbitrary topologies. By that means, we identify a symmetry operation in the class of elementary cellular automata. Moreover, we determine the subset of topologically sensitive elementary cellular automata and find that the overall number of complex patterns decreases under increasing neighborhood size in regular graphs. As exemplary applications, we apply the formalism to complex networks and compare the potential of scale-free graphs and metabolic networks to generate complex dynamics.Comment: 5 pages, 4 figures, 1 table. To appear in Physics Letters

Hearing the shape of a room

PMCID: PMC3725052The final published version of this article can be found here: www.pnas.org/cgi/doi/10.1073/pnas.130993211

Financial services for SME fisheries: the case study of South Africa

The primary objective of the South Africa case study has been to assess the availability of and access to financial services by SMEs in the fisheries sector. Fieldwork took place during 6-12 March 2011 in Cape Town, Port Elizabeth and Port St Francis, while desk research provided background information about the overall context of the economy and the fisheries sector in South Africa. This summary highlights key findings surrounding three areas: (1) overall context of finance for fisheries in South Africa; (2) current external and internal constraints to the development of the squid and tuna sectors; and (3) financial models for SMEs in the fisheries sector