The cost of ownership in microfinance organization

Roy Mersland

MPRA Paper from University Library of Munich, Germany

Abstract: This article analyses the cost of ownership in microfinance organizations. We specifically compare the ownership-cost of Shareholders Firms (SHFs), Non Profit Organizations (NPOs) and Cooperatives (COOPs). A paradoxical situation motivates us: Most providers of microfinance, both historically and today, are NPOs or COOPs, while several policy papers advocate SHFs. Based on an extension of Hansmann’s (1996) economic theory of ownership we propose that cost variables related to market contracting of microfinance services favor NPOs and COOPs, whereas most cost variables related to the practice of ownership favor SHFs. We conclude that in severe imperfect markets, where most microfinance organizations operate, NPOs and COOPs are still needed.

Keywords: Microfinance; ownership; corporate governance; nonprofits; transformation; global study (search for similar items in EconPapers)
JEL-codes: G32 O16 (search for similar items in EconPapers)
Date: 2007-01-15
New Economics Papers: this item is included in nep-bec, nep-dev and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Cost of Ownership in Microfinance Organizations (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2061

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