Microfinance Institutions (MFIs) in Latin America: Who Should Finance the Entrepreneurial Ventures of the Less Privileged?

R. Cervelló-Royo (), I. Moya-Clemente and G. Ribes-Giner
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R. Cervelló-Royo: Universidad Politécnica de Valencia (UPV)
I. Moya-Clemente: Universidad Politécnica de Valencia (UPV)
G. Ribes-Giner: Universidad Politécnica de Valencia (UPV)

Chapter Chapter 17 in New Challenges in Entrepreneurship and Finance, 2015, pp 235-245 from Springer

Abstract: Abstract The purpose of this paper is to study the relationship of the so-called microfinance in the entrepreneurial activity of small business entrepreneurs. To do this, the activity of microfinance institutions in Latin America is analysed, as a higher degree of this kind of activity has been reached in this continent. To this end, the current paper analyses the granting of small loans to micro-entrepreneurs who, due to the economic conditions in their countries, can not find jobs and decide to start their own small businesses or micro-enterprises to improve their own and their families standard of living. These entrepreneurs, lacking financial resources, are left outside the conventional banking system as such operations are too risky and expensive to be profitable. Therefore, microcredits stand as an alternative that prevents them from relying on predatory lenders whose extremely high interest rates do not allow to start new projects. This improvement is especially significant in the case of women.

Keywords: Total Asset; Social Entrepreneurship; Social Entrepreneur; Loan Portfolio; Microfinance Institution (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-08888-4_17

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DOI: 10.1007/978-3-319-08888-4_17

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