Commercial Banks in Microfinance: New Actors in the Microfinance World
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 2372
Commercial banks are becoming the new actors in the world of microfinance now that repressive financial market policies have been dismantled in many developing countries. This study documents and discusses the major issues banks must confront to provide microlending services to low income clienteles. The recent experiences of eighteen banks are investigated in terms of new products and financial technologies, and organizational structure and regulation. Their institutional performance in outreach and sustainability is also highlighted from interviews with bank officers. Lessons from these experiences are summarized along with recommendations to the donor community to facilitate these new initiatives.