Microfinance and Poverty Reduction: The problematic experience of Communal Banking in Peru

Ana Marr ()
Additional contact information
Ana Marr: Department of Economics, SOAS University of London, UK

No 122, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: As a response to many partial and over-simplistic theoretical and empirical studies, this paper presents a more comprehensive analytical framework for assessing the success of microfinance in achieving its dual objective of financial sustainability and poverty reduction. By giving centre stage to the study of group dynamics and using principles of social psychology and imperfect information, the paper argues that microfinance has not only not solved the original problems of information asymmetries between borrowers and lenders but also, in its pursuit of financial sustainability, is destroying the very foundations of these schemes by disrupting the social fabric of communities, creating more poverty and excluding the poorest and most vulnerable from any given group.

Keywords: Microfinance; Poverty; Information Asymmetries; Latin America; Peru (search for similar items in EconPapers)
JEL-codes: G14 G23 G32 O12 O17 O54 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2002-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.soas.ac.uk/sites/default/files/2022-10/economics-wp122.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:122

Access Statistics for this paper

More papers in Working Papers from Department of Economics, SOAS University of London, UK Contact information at EDIRC.
Bibliographic data for series maintained by Chandni Dwarkasing ().