Abstract

http://ssrn.com/abstract=976775
 
 

References (20)



 
 

Citations (45)



 


 



Financial Performance and Outreach: A Global Analysis of Leading Microbanks


Robert Cull


World Bank - Development Research Group (DECRG)

Asli Demirgüç-Kunt


World Bank - Financial and Private Sector Development; World Bank

Jonathan Morduch


New York University (NYU) - Robert F. Wagner Graduate School of Public Service; New York University (NYU) - Department of Economics


Economic Journal, Vol. 117, No. 517, pp. F107-F133, February 2007

Abstract:     
Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers.

Number of Pages in PDF File: 27

Accepted Paper Series





Date posted: April 3, 2007  

Suggested Citation

Cull, Robert and Demirgüç-Kunt, Asli and Morduch, Jonathan, Financial Performance and Outreach: A Global Analysis of Leading Microbanks. Economic Journal, Vol. 117, No. 517, pp. F107-F133, February 2007. Available at SSRN: http://ssrn.com/abstract=976775 or http://dx.doi.org/10.1111/j.1468-0297.2007.02017.x

Contact Information

Robert Cull (Contact Author)
World Bank - Development Research Group (DECRG) ( email )
1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-6365 (Phone)
202-522-1155 (Fax)
HOME PAGE: http://econ.worldbank.org/staff/rcull
Asli Demirgüç-Kunt
World Bank - Financial and Private Sector Development ( email )
United States
202-473-7479 (Phone)
202-522-1155 (Fax)
HOME PAGE: http://econ.worldbank.org/staff/ademirguckunt/
World Bank ( email )
1818 H Street, NW
Washington, DC 20433
United States
Jonathan Morduch
New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )
The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States
(212) 998-7515 (Phone)

New York University (NYU) - Department of Economics ( email )
269 Mercer Street, 7th Floor
New York, NY 10011
United States
HOME PAGE: http://www.nyu.edu/projects/morduch
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References:  20
Citations:  45

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