|Title / Titel||Building Successful Microfinance Institutions – Guiding Principles and Regulatory Frameworks|
|Abstract (PDF, 14 KB)|
|Summary / Zusammenfassung||Microfinance is a powerful tool for the poor with the potential to enhance their livelihoods. However, if misapplied, it can bring significant harm to a microfinance client’s life. With increasing attention around the globe microfinance has become commercialized and problems have developed, which has made microfinance markets unstable. As a result of mismanagement, political interference, the global economic recession, and concentrated market competition, several microfinance markets have collapsed in the past years. Nevertheless, microfinance has become one of the most important sub-sectors in the field of international development. Moreover, the more commercialized microfinance becomes, the more questions arise about how – or, if at all – to integrate it into mainstream financial systems. However, this growing industry is facing similar problems as the finance industry in general, especially in the area of consumer protection and regulatory matters.
Microfinance is a relatively young and constantly changing research field. Existing literature about microfinance is diverse and numerous. Yet, studies that are situated where normative and empirical theories intersect are rare. Unlike empirical studies, this project will focus on theorizing about what ought to be and, in a second step, it will combine these insights with empirical findings in order to further our understanding of the issue.
Therefore, this project is divided into a normative and an empirical part. The following research questions will be elaborated by means of narrative methods, comparative analysis, and case study methods. The normative section will discuss two research questions: How and on the basis of what principles should microfinance institutions (MFIs) be designed in order to best accomplish their purpose? How should the regulatory framework of the microfinance industry, which becomes manifest in self-regulation, government-regulation, and transnational-regulation processes, be organized to support MFIs in their daily operations? The empirical section will elaborate the following two questions: Whether MFIs could work with and integrate the normative claims into practice, and if so, how? Which types of regulation further or hinder MFIs in their operations and, especially, from pursuing their social mission? This project aims to disclose the normative dimensions of microfinance and attempts to link them to empirically detectable phenomena in today’s microfinance industry. Mapping out the normative dimensions of microfinance and linking these to actual practices of microfinance will help to gain new insights into how to design MFIs. In addition, this project will contribute to an understanding of the dependencies between MFIs and the corresponding regulatory frameworks. It will provide practical implications for the industry.
|Keywords / Suchbegriffe||microfinance, microfinance institutions, normative political theory, empirical theories, government regulation, self-regulation, transnational regulation, corporate structure|
|Project leadership and contacts /
Projektleitung und Kontakte
|Funding source(s) /
|Universität Zürich (position pursuing an academic career)
|Duration of Project / Projektdauer||Aug 2011 to Jul 2014|