Public-private partnerships in microfinance: Should NGO involvement be restricted?

Jaideep Roy and Prabal Roy Chowdhury (prbalrc@isid.ac.in)
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Prabal Roy Chowdhury: Indian Statistical Institute, New Delhi

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: This paper examines public-private partnerships in micro-finance, whereby NGOs can help in channelizing credit to the poor, both in borrower selection, as well as in project implementation. We argue that a distortion may arise out of the fact that the private partner, i.e. the NGO, is a motivated agent. We find that whenever the project is neither too productive, nor too unproductive, reducing such distortion requires unbundling borrower selection and project implementation, with the NGO being involved in borrower selection only. Further, we compare and contrast two alternative credit delivery mechanisms, the linkage mechanism (which is the focus of this paper), with the `Grameen' one.

Keywords: Public-private partnerships; micro-finance; motivated agent; NGO; Ownership (search for similar items in EconPapers)
JEL-codes: E62 G21 G28 H5 O17 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-06
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http://www.isid.ac.in/~pu/dispapers/dp08-11.pdf (application/pdf)

Related works:
Journal Article: Public-private partnerships in micro-finance: Should NGO involvement be restricted? (2009)
Working Paper: Public-private Partnerships in Micro-finance: Should NGO Involvement be Restricted? (2007)
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