From Revolution to Evolution: Charting the Main Features of Microfinance 2.0

Authors: Mendoza, Ronald U.¹; Vick, Brandon C.²

Source: Perspectives on Global Development and Technology, Volume 9, Numbers 3-4, 2010 , pp. 545-580(36)

Publisher: BRILL

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Abstract:

The past 30 years or so have seen microfinance take off from small group-based lending experiments to several thousand microfinance institutions (MFIs) serving a growing portion of the developing world today. Nevertheless, the challenge to improve broad-based access to financial services remains—going beyond credit and into other products such as savings, insurance, and money transfer services. Where is the microfinance industry headed? This essay reviews the available evidence and argues that both the public and private spheres are crucial to the continued dynamism and expansion of the microfinance industry: the private sector continuing as a source of product and process innovations; and the public sector taking on a strong market enabling and development role. JEL: D52; O31; Q13

Keywords: microfinance; market failures; information; innovation

Document Type: Research article

DOI: http://dx.doi.org/10.1163/156914910X499813

Affiliations: 1: Asian Institute of Management Makati City 1260, Metro Manila Republic of the Philippines, Email: ronmendoza@post.harvard.edu 2: Fordham University, Department of Economics Bronx, New York 10458 USA, Email: vick@fordham.edu

Publication date: 2010-06-01