Microfinance Costs, Lending Rates and Profitability

Roy Mersland and R. Øystein Strøm
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Roy Mersland: UIA - University of Agder

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Abstract: This chapter gives the reader an introduction to microfinance and reports how the industry has moved from generally being praised to increasingly being criticized. Particularly the chapter addresses the concern that microfinance institutions chase profits and are moving away from the poor customer segments. Our findings indicate that rather than being an industry with high profits the industry struggles with high costs and low earnings. We also find that the focus on serving poor customers do not change over time. Thus, the 'mission drift' claim cannot be confirmed.

Keywords: Effects of Microfinance; Grameen Bank; History of Microfinance; Interest rates; MFIs; Microfinance; Mission drift; Muhammad Yunus; Operating costs; Profitability; Critics of Microfinance; Critics of Microfinance Effects of Microfinance Grameen Bank History of Microfinance Interest rates MFIs Microfinance Mission drift Muhammad Yunus Operating costs Profitability (search for similar items in EconPapers)
Date: 2013
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Published in Handbook of Key Global Financial Markets, Institutions, and Infrastructure, Elsevier, pp.489-499, 2013, ⟨10.1016/B978-0-12-397873-8.00046-3⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05222122

DOI: 10.1016/B978-0-12-397873-8.00046-3

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