Social Collateral, Repayment Rates, and the Creation of Capital Among the Clients of Microfinance

Hadi, Nabawiyah Abdul; Kamaluddin, Amrizah

doi:10.1016/s2212-5671(15)01172-7

Cited by 25 publications

(16 citation statements)

References 19 publications

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“…As individuals, these borrowers do not have surety to offer banks, but as a group they have more bargaining power when it comes to obtaining loans. The group takes responsibility for repaying the loan: if one person does not pay, the others will refund the bank (Hadi and Kamaluddin, 2015; Dowla, 2006). Individual microloans are common practice in some countries, but microfinance is the most popular form of credit in many parts of the world, and the associated group lending practices have evolved since they were first pioneered in the 1970s.…”

Section: Microfinance Programsmentioning

confidence: 99%

Multilevel latent class modeling to segment the microfinance market

Souza

Bassi

Freitas

2019

IJBM

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Purpose Microfinance has become an important way to alleviate poverty. Though four decades have passed since its introduction, its impact is still not entirely clear. What makes it difficult to ascertain its efficacy is the existence of diverse types of microfinance organizations and client profiles. Microfinance institutions must primarily pay more attention to the client, and to the mechanism through which financial services are delivered. The purpose of this paper is to identify the profiles of microfinance customers and the features of their operations. Design/methodology/approach In this paper, multilevel latent class models were estimated to reveal clusters of operations and classes of clients. Findings The results show that there are six clusters of operations and four classes of clients in the market, each with distinct profiles and needs. Different strategies are recommended for each cluster and class. Originality/value Numerous studies have focused on the importance of getting to know the clients of microfinance programs, but none as yet have used market segmentation as a way to do so. The goal is to generate better strategies to help clients improve their business results. Applying market segmentation to the microfinance market may point to different products for different groups of clients, taking the real needs of each of them into account.

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Section: Microfinance Programsmentioning

confidence: 99%

Multilevel latent class modeling to segment the microfinance market

Souza

Bassi

Freitas

2019

IJBM

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“…The Consultative Group to Assist the Poor (CGAP), global body striving to achieve financial inclusion for poor defines microfinance as the delivery of financial services to poor and low-income groups (Hadi & Kamaluddin, 2015). The definition has taken its roots from microcredit and microfinance has emerged as a broader concept where financial services are not limited to lending of small loans but encompasses savings, trainings of families on financial management and insurance services.…”

Section: Micro-financing and Povertymentioning

confidence: 99%

Transforming Lives through Empathy, Compassion, Societal Well Being and Management Best Practices Case of Akhuwat, Pakistan

Chaudhry

Khan

Hassan

et al. 2019

JMR

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How often do we see businesses of modern world really following the principles of stakeholder theory in true letter and spirit, safeguarding the interests of large number of stakeholders not just their customers and also treating society at large as their stakeholder?Are businesses and management practices truly consistent with social contract of organizations with society? The prevalence of business with societal well-being concept is rare despite the fact that world at large is the advocate of societal well-being. The case of Akhuwat Pakistan presents various insights for modern business practitioners; small business models that have question marks with respect to their sustainability in early years can do wonders at later stages and become success case studies if business objectives are linked with social development and entrepreneurial capacity building. Akhuwat is the example where corporate social responsibility and thrust for poverty alleviation is not just a marketing tool to remain alive in popularity contest but the mechanism and inspiration to serve and love humanity. This case study is narrative in its methodology and focuses on key success factors of the organization under study. The rational and social lens application reveals that exploration of best management practices is pertinent for businesses today to replicate them by adopting universalistic management perspective for ultimate success and exaltation.

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“…Albanese and Van Fleet (1985) explained Olson's Free-rider theory by arguing that it was originally concerned with the provision of public goods to a large group of individuals. Theoretically, providing free products or services to individuals may result in inefficiency and under-provision of those goods or services (Cullitty, 1995;Russell, 2003;Hadi & Kamaluddin, 2015). In economic literature, studies suggested that providing "free money" or grants to recipients may result in an inefficiency of fund utilization.…”

Section: Free-rider Theorymentioning

confidence: 99%

Enterprise Governance of Micro Entrepreneurs in Malaysia: Comparison between the Amanah Ikhtiar Malaysia and Asnaf’s Economic Development Program

Aida

Normah

Rashidah³

2018

GJAT

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Enterprise governance is vital for all types of organizations, including micro entrepreneurs, as it is closely related to performance. Considering that repayable and non-repayable types of microfinance programs exist in Malaysia, this study examines whether different types of financing affect the financial and non-financial performances of micro entrepreneurs. Based on the questionnaires distributed to 485 micro entrepreneurs from Amanah Ikhtiar Malaysia (AIM) and Pusat Pembangunan Usahawan Asnaf Zakat Selangor, followed by interview sessions with 17 of them, this study found that although asnafs financially perform lower than the AIM sahabats, asnafs are generally more satisfied with their overall conditions. The findings suggested that both types of financing have their strengths and weaknesses. Therefore, to improve the current overall practice of microfinance programs in Malaysia, non-repayable programs were recommended to focus on hardcore poor entrepreneurs, whereas repayable programs were advised to focus on the poor category.

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Social Collateral, Repayment Rates, and the Creation of Capital Among the Clients of Microfinance

Cited by 25 publications

References 19 publications

Multilevel latent class modeling to segment the microfinance market

Multilevel latent class modeling to segment the microfinance market

Transforming Lives through Empathy, Compassion, Societal Well Being and Management Best Practices Case of Akhuwat, Pakistan

Enterprise Governance of Micro Entrepreneurs in Malaysia: Comparison between the Amanah Ikhtiar Malaysia and Asnaf’s Economic Development Program

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