Proposal for Strategies to Build Missing Foundations of the Current Microfinance Industry

Tomáš Hes (), Karel Srnec () and Martina Drašarová ()
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Tomáš Hes: Czech University of Life Sciences, Prague, Czech Republic
Karel Srnec: Czech University of Life Sciences, Prague, Czech Republic
Martina Drašarová: Czech University of Life Sciences, Prague, Czech Republic

Annals of the University of Petrosani, Economics, 2011, vol. 11, issue 1, 105-114

Abstract: As microfinance approaches the status of mainstream asset class, it inevitably starts to entice Socially Responsible Investment 1 . However, precoscious capital inflow can be detrimental to all players involved. The industry is unprepared for global SRI arena. The gap between different microfinance concepts is widening, while identic terms are being used to describe different contents. The term „microfinance“ continues losing its informative value as divergent development foments nomenclative disorder. Microfinance is becoming too varied to be presented under a single term. MIVs 2 , States and multilateral institutions must therefore in a concerted action impose basis of unified definitions, methodologies and coordinates, otherwise different concepts might mislead international public. The lack of standartized set of definitions, social impact reporting, bankrupcy procedures and evaluation infrastructure, while overstating development benefits can discredit microfinance, once SRI systems open their gates.

Keywords: microfinance; funding; centralization; development; FX risk; guarantee; SRI; inefficiency; coordination (search for similar items in EconPapers)
JEL-codes: G21 L26 O16 (search for similar items in EconPapers)
Date: 2011
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