Microfinance Commercialization and Mission Drift

Designing Credit Agent Incentives to Prevent Mission Drift in Pro-Poor Microfinance Institutions

Credit agents in microfinance institutions (MFIs) must be given incentives to acquire information on potential borrowers and select them in accordance with the MFI’s objectives. We show that while giving incentives has no cost in for-profit MFIs, it is costly in propoor MFIs: When repayment and wealth are positively correlated, a pro-poor MFI cannot obtain the selection of poor clients in the p...

Technology Commercialization as University Mission: Early Historical Developments at the University of Toronto.

Canadian universities are perceived as less vibrant and engaged generators of technologies with commercial value than their American counterparts, and such perceptions have driven science policy for decades. This paper shows that contrary to these prevailing views, Canada's largest university has a long history of experience in dealing with the technological gaps in national industry and in att...

Microfinance and Dynamic Incentives

Dynamic incentives, where incentives to repay are generated by granting access to future loans, is one of the methodologies used by microfinance institutions (MFIs). In this paper, I present a model of dynamic incentives where lenders are uncertain over how much borrowers value future loans. Loan terms are determined endogenously, and loans become more favorable as the probability of default be...

Microfinance and Financial Development

Microfinance Games

Microfinance has been heralded as an effective way to address imperfections in credit markets. From a theoretical perspective, however, the success of microfinance contracts has puzzling elements. In particular, the group-based mechanisms often employed are vulnerable to free-riding and collusion, although they can also reduce moral hazard and improve selection. We created an experimental econo...