The Cost of Ownership in Microfinance Organizations

Roy Mersland

EconStor Open Access Articles and Book Chapters, 2009, vol. 37, issue 2, 469-478

Abstract: We compare the ownership-cost of Shareholders Firms (SHFs), Non Profit Organizations (NPOs) and Cooperatives (COOPs) involved in microfinance. A paradoxical situation motivates us: Most providers, both historically and today, are NPOs or COOPs, while policy papers advocate SHFs. We lay out a theoretical framework to better understand ownership costs in microfinance organizations. We propose that cost variables related to market contracting favor NPOs and COOPs, whereas most cost variables related to the practice of ownership favor SHFs. We conclude that what best serves the customers is coexistence of ownership types, and we call for empirical research to test the theory.

Date: 2009
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Related works:
Journal Article: The Cost of Ownership in Microfinance Organizations (2009)
Working Paper: The cost of ownership in microfinance organization (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:323962

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