The Cost of Ownership in Microfinance Organizations

Roy Mersland
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Roy Mersland: University of Agder

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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.

Keywords: Microfinance; ownership; corporate governance; nonprofits; cooperatives; transformation; Microfinance ownership corporate governance nonprofits cooperatives transformation (search for similar items in EconPapers)
Date: 2009-02
Note: View the original document on HAL open archive server: https://hal.science/hal-05218458v1
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Published in World Development, 2009, 37 (2), pp.469-478. ⟨10.1016/j.worlddev.2008.03.006⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05218458

DOI: 10.1016/j.worlddev.2008.03.006

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