The Life Cycle of a Microfinance Institution: An Economic Analysis of the Irish Loan Funds

Posted: 7 Feb 2002

See all articles by Aidan Hollis

Aidan Hollis

University of Calgary - Department of Economics

Arthur Sweetman

McMaster University - Department of Economics; McMaster University - Centre for Health Economics and Policy Analysis (CHEPA); IZA Institute of Labor Economics

Abstract

Ireland's loan funds were a long-lived, self-sustaining, large-scale microfinance organization that made millions of loans, without collateral, to the poor. During the first hundred years of their life-cycle, a period of growth ending in the 1840s, they adapted constantly and obtained improvements to their legal structure because they were complementary to the banking system and seen as effective in relieving poverty. In their second century they became ossified, in part because of competition with commercial banks. The loan funds provide an example of sustainable microfinance under harsh economic conditions and illustrate how organizations change incrementally and, when successful, alter their institutional framework.

Keywords: microfinance, Ireland, New Institutional Economics

JEL Classification: N23, O16

Suggested Citation

Hollis, Aidan and Sweetman, Arthur, The Life Cycle of a Microfinance Institution: An Economic Analysis of the Irish Loan Funds. Economic Behavior & Organization, Vol. 46, No. 3, October 2001. Available at SSRN: https://ssrn.com/abstract=283452

Aidan Hollis (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
403-220-5861 (Phone)
403-220-5262 (Fax)

Arthur Sweetman

McMaster University - Department of Economics ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

McMaster University - Centre for Health Economics and Policy Analysis (CHEPA) ( email )

1280 Main St. W
Hamilton, ON L8S 4M4
Canada

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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