Microfinance and Multiple Borrowing in Sri Lanka

Ganga Tilakaratna and David Hulme

South Asia Economic Journal, 2015, vol. 16, issue 1, 46-63

Abstract: In recent years, there has been an increase in multiple borrowing in the microfinance sector in Sri Lanka, while many microfinance institutions (MFIs) have experienced high levels of borrower turnover, deteriorating portfolio quality and weak financial performance. This has raised concerns about the microfinance sector. However, the debt levels for the majority of borrowers remain at moderate levels, while a number of mitigating factors such as mobilization of borrower savings by MFIs, wide use of pawning among clients and a reduction in donor funds to the sector suggest that a microcredit bubble in Sri Lanka is unlikely in the near future.

Keywords: Microfinance; multiple borrowing; credit; banks; Sri Lanka; South Asia (search for similar items in EconPapers)
JEL-codes: G23 G32 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:soueco:v:16:y:2015:i:1:p:46-63

DOI: 10.1177/1391561415575127

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