Can Microfinance Achieve Both Social and Financial Goals? Investigation on MicroCred Nanchong

Huacen Xu ()
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Huacen Xu: University of Maryland

Chapter Chapter 1 in Inclusive Finance in China, 2021, pp 3-25 from Springer

Abstract: Abstract MFIs (Microfinance Institutions) are beset with a major problem of how to balance both the social goal of serving vulnerable groups and the commercial goal of making financial profits. MicroCred Nanchong Co., Ltd (hereinafter referred to as “MicroCred Nanchong”), the first wholly foreign-owned micro-credit company in China, expects to achieve its social goal through social performance management. Meanwhile, despite resource constraints, MicroCred Nanchong strives for financial profits and accomplishes its financial goal based on the leverage of interest rate by balancing the depth and scope of service as well as the efficiency of production and management, and effectively controlling the operating cost. By doing this, it has established an internal mechanism that gives consideration to both social and commercial goals. MFIs can learn how to achieve both goals from the success of MicroCred Nanchong.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-16-1788-1_1

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DOI: 10.1007/978-981-16-1788-1_1

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