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Major investments have been made in developing microfinance in Asia with reducing poverty as one of the frequently stated objectives. A variety of institutional forms of microfinance are being introduced in the region including by the ADBand financial institutions pursue different objectives, so it is difficult to assess how well microfinance is actually contributing to poverty alleviation. There is little systematic data available on which to make global or regional generalizations. The objective of this paper is to provide some insights into how well the industry is performing by summarizing and evaluating key studies and data for the region. A critical triangle of microfinances, including outreach, sustainability and impact, is used as the conceptual framework to organize the presentation. Criteria are defined for these three objectives and methodological problems are discussed for each. Evaluating impact presents the most serious empirical challenge. The results reveal that outreach is quite impressive, especially in Bangladesh and Indonesia. Millions of poor households in the region are now receiving formal financial services because of the expansion of microfinance. Financial sustainability, however, is an important problem facing the industry in most countries. Many microfinance institutions still depend on government and donor subsidies for their existence. The impact studies reviewed reported some positive benefits but they vary by gender, type of program and country. Several implications of these findings for microfinance institutions and decision makers are discussed.

In früheren Kreditprogrammen zur ländlichen Entwicklung wurde die Mobilisierung der auf dem Lande erwirtschafteten Ersparnisse oft vernachlässigt. Seit Mitte der achtziger Jahre hat sich die Situation geändert. Der Autor geht sechs Fragen nach: Ursachen für die Versäumnisse der Vergangenheit; Bedeutung der Ressourcenmobilisierung für ländliche Finanzinstitute; Mobilisierungspotential; Faktoren, die zur Mobilisierung beitragen; Ergebnisse experimenteller Projekte; künftige Aufgaben. (DÜI-Wsl)

AbstractUtilizing a geometric mean wealth maximization approach, this paper shows potential differences between the capital structure preferred by stockholders and the one preferred by managers. In general, managers may prefer more conservative, equity‐oriented financing, while stockholders desire greater financial leverage. The problem arises because of differences in the degree of portfolio diversification achieved by managers and stockholders. Stockholders tend to have reasonably well‐diversified portfolios, causing them to be concerned with systematic risk. Managers' portfolios are apt to be more concentrated and directly tied to the financial success of an employer, causing managers to be concerned with total risk. Thus, for a given capital structure, each party views the firm as having a different level of risk. Several executive compensation plans are considered that might more closely align the interests of managers and stockholders.

The paper constructs a theoretical framework that describes the social worth of a microfinance organization and then analyzes evidence of depth of outreach for five such institutions in Bolivia. Most of the poor households reached by them were near the poverty line - they were the richest of the poor. Group lenders had more depths of outreach than individual lenders. The urban poorest were more likely to be borrowers, but rural borrowers were more likely to be among the poorest. (DSE/DÜI)

Survey data obtained 1985-1989 on 286 farm households in 5 Philippine rice-growing villages are used to examine the determinants of choice of land-pawning contracts & the observed loan size. Cross-section analysis shows that pawning is an informal credit instrument used by small farmers to obtain large loans to finance productive investments, eg, nonfarm employment, where the returns to investment are high. The econometric results suggest that poorer farm households pawn-out land, while wealthier farm households pawn-in. The observed loan size is explained by reputation of pawners & rice cropping intensity in the region. 4 Tables, 19 References. Adapted from the source document.

The initial success of microfinance programs in the 1970s led pioneers to think that many essential problems of the poor might be resolved by access to credit alone -- the ability to acquire assets, to start businesses, to finance emergency needs and to insure against illness and disaster. Part of that vision has certainly been realized. But much remains to be done. Most microfinance institutions (MFIs) are still small and vulnerable to constraints on their resources and to the risks inherent in single-issue portfolios. Most depend upon donors and governments to remain in operation. There is much waste and duplication, and some mature programs have declining loan recovery rates, even as competition for borrowers rises from conventional banks and finance companies. Analyzing the failures of credit programs aimed at small farmers and the successes of other programs showed the need for new understanding of the ways that poor households make spending, borrowing, and saving decisions. This area was previously neglected in policymaking on food security issues. The International Food Policy Research Institute (IFPRI) supported household surveys in nine Asian and African countries during the 1990s that analyzed formal and informal financial transactions, and it also evaluated the success of innovative approaches at some MFIs. The overall goal was to clarify the conditions under which state investment in microfinance programs might improve life for poor people more than state investment of the same funds in education, health, nutrition, or infrastructure development. The research led to the concept of the critical triangle of microfinance" -- the need for any MFI to manage simultaneously the problems of outreach (reaching the poor both in terms of numbers and depth of poverty), financial sustainability (meeting operating and financial costs over the long term), and impact (having discernible effect upon clients' quality of life). This book elaborates on these objectives and shows that the most successful MFIs expand all sides of that triangle. Tradeoffs are sometimes inevitable, but even so, synergies among the three make the concept valuable -- from Author's Abstract." ; PR ; IFPRI1