Microfinance Control Fraud in Latin America

Butcher, Will; Galbraith, James K.

doi:10.1080/07360932.2015.1056203

Cited by 9 publications

(7 citation statements)

References 9 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…However, higher rate of competition due to constantly increasing numbers of new entries in the industry made funding more complicated and competitive (Armendariz et al, 2011). The attempt of MFIs to find a different path to boost their financial self-reliance has resulted in commercialization of many MFIs (Butcher & Galbraith, 2015;Pinz & Helmig, 2015).…”

Section: Introductionmentioning

confidence: 99%

The Influence of Institutional Characteristics on Financial Performance of Microfinance Institutions in the OIC Countries

Ibrahim¹,

Ahmed²,

Minai³

2018

Economics &Amp; Sociology

View full text Add to dashboard Cite

Microfinance institutions (MFIs) proved to be a powerful tool for financial inclusion through developing entrepreneurial activities in rural areas. MFIs provide small-scale loans to the poor who have no access to traditional banking and financial system. However, in the pursuit to meet their social obligation, MFIs need to be financially sustainable and this sustainability largely depends on the institution's characteristics. This study investigates the influence of MFIs' characteristics on their financial performance, using the panel dataset of 57 microfinance institutions from the member countries of the Organisation of Islamic Cooperation (OIC). The empirical results show that, as expected, the interest rate charged and the period of existence in the market have a significant positive relationship with the financial performance of MFIs. The results also indicate that credit union and cooperatives, non-bank financial institutions and non-governmental organisations outperformed their counterparts financially. Therefore, the study concludes that charging a high rate of interest may improve institutions' financial self-sufficiency; however, it is unable to secure MFIs' profit maximization strategy. Conversely, not-for-profit MFIs can ensure their financial viability while serving the poorest clients which is the prime goal of any microfinance program. Hence, MFIs can earn profits, but within limits, complying with their social promise at the same time.

show abstract

Section: Introductionmentioning

confidence: 99%

The Influence of Institutional Characteristics on Financial Performance of Microfinance Institutions in the OIC Countries

Ibrahim¹,

Ahmed²,

Minai³

2018

Economics &Amp; Sociology

View full text Add to dashboard Cite

show abstract

“…Luego de que en 2007 se reportara que la tasa de interés real estaba siendo en promedio de 108 %, lo cual en lugar de asistir a la pobreza la profundizaba, el Gobierno ecuatoriano introdujo medidas que llevaron a que la tasa bajara gradualmente a 37 %. De esta manera, los techos para las tasas de interés, las medidas de protección al consumidor y los incentivos para fondos locales permitieron la consolidación de uno de los sistemas microfinancieros mejor regulados en el mundo, en términos de protección al consumidor y restricción a los excesos del mercado microfinanciero (Butcher & Galbraith, 2015).…”

Section: En Concordancia Conunclassified

“…Por otra parte, quienes desaprueban este tipo de medidas argumentan que desincentivan la competencia e incrementan la proliferación de prestamistas informales e incluso ilegales; no obstante, el caso ecuatoriano ilustra los efectos positivos de esta medida, al presentar otras alternativas institucionales para competir generando utilidades razonables; adicionalmente, se ha impulsado la transparencia en la industria microfinanciera por medio de estrictos requerimientos que prohíben cobros adicionales; finalmente el establecimiento de controles y monitoreo ha prevenido las actividades de crédito ilegales. Equivalentemente, en Bolivia la fuerte supervisión ha permitido que se presente la menor tasa de interés en Latinoamérica, al ser aproximadamente igual al 20 % en promedio, gracias a los límites establecidos y a los subsidios de crédito provenientes del Gobierno (Butcher & Galbraith, 2015). Pese a la efectiva regulación y supervisión, el papel de las microfinanzas no ha llegado a consolidarse como una fuerza positiva para el desarrollo de las economías mencionadas.…”

Section: En Concordancia Conunclassified

Las microfinanzas rurales en Colombia y el proceso de financiarización: un estudio de caso

Virviescas¹,

Guevara²

2021

Apuntes CENES

View full text Add to dashboard Cite

El crecimiento desregulado de las microfinanzas representa una amenaza para la sostenibilidad y materialización de su misión. El presente artículo busca ahondar en el desarrollo de las microfinanzas rurales en Colombia, yendo más allá del análisis de inclusión financiera. Con este propósito, se aplica el método de investigación cualitativo, que se integra con la revisión de los índices financieros relacionados con la oferta de microcrédito al sector rural colombiano. De manera complementaria al estudio de alcance nacional, se realiza y analiza la Encuesta sobre uso de productos y servicios microfinancieros en zonas rurales 2018, con el fin de profundizar en la percepción local y regional sobre los servicios microfinancieros en siete municipios pertenecientes a las categorías 4, 5 y 6 de los departamentos de Boyacá y Santander. Tal análisis permite evidenciar que las microfinanzas rurales no son per se una solución para la pobreza, pero sí se consolidan como un instrumento a partir del cual se viabilizan y se hacen sostenibles las iniciativas productivas del campo colombiano, por lo cual sirven como herramienta complementaria a las políticas para el desarrollo rural.

show abstract

“…For instance, in Latin America, Butcher and Galbraith (2019) show that the microfinance sector provides an environment suitable for Ponzi schemes or Ponzi-type dynamics, the misrepresentation of financial and operating performance, concentration in unregulated markets and areas most conducive to accounting fraud, non-transparency and secrecy, dubious accounting methods, lobbying in favor of deregulation, executive use of the company resources for personal gain, excessive risk taking at the expense of investors' capital, and the inevitable collapse of many microfinance institutions, among others. In South Africa, Bateman (2019) show that South Africa adopted the US model of microcredit.…”

Section: The Transition To Digital Financementioning

confidence: 99%

Contesting digital finance for the poor

Ozili¹

2020

DPRG

View full text Add to dashboard Cite

Purpose This paper aims to critically assess digital finance as a pro-poor intervention in the development finance space. Design/methodology/approach Using critical policy discourse analysis, this paper explains the turn from microfinance to digital finance, and thereafter discusses four issues: the lack of evidence that digital finance for poor people actually promotes socioeconomic development; the risks that poor people are exposed to, which arises from their exposure to digital finance technology; the lack of evidence that digital finance actually brings poor people immediate benefits; and the weak business rationale for digital finance. Findings The expectation for digital finance serving as a major pro-poor private sector intervention lacks justification. Originality/value The paper reflects on the effect of digital finance for poor people.

show abstract

Microfinance Control Fraud in Latin America

Cited by 9 publications

References 9 publications

The Influence of Institutional Characteristics on Financial Performance of Microfinance Institutions in the OIC Countries

The Influence of Institutional Characteristics on Financial Performance of Microfinance Institutions in the OIC Countries

Las microfinanzas rurales en Colombia y el proceso de financiarización: un estudio de caso

Contesting digital finance for the poor

Contact Info

Product

Resources

About