Information asymmetry is one of the fundamental problems that online peer-to-peer (P2P) lending platforms face. This problem becomes more acute when platforms are used for microfinance, where the targeted customers are mostly economically under-privileged people. Most of the prior empirical studies have been based on data from Prosper.com or similar sites that compete in traditional consumer lo...

This paper studies TRAIL, a variation on traditional microfinance, where a microfinance institution appoints local intermediaries (traders or informal moneylenders) as agents to recommend borrowers for individual liability loans. Agents earn commissions that depend on loan repayments. There are no peer monitoring, group meetings or savings requirements. The loans are designed to finance agricul...

Microfinance institutions focus on providing financial services for low-income citizens who typically lack access to traditional banking systems. In recent years there has been an significant growth in the number of online microlending sites that connect lenders to microfinance institutions and individuals that require funding. Although traditional (offline) microfinance has been widely studied...

considering the expansion of global poverty and its resulting concerns, the objectives of the millennium development goals (mdgs) may not be achieved unless a solution is found for this widespread phenomenon. therefore finding a solution for poverty reduction and improving the welfare of the vulnerable group has become a universal objective. this paper discusses the poor performance of formal f...

Savings-led microfinance programs operate in poor rural communities in developing countries to establish groups that save and then lend out the accumulated savings to each other. Nonprofit organizations train villagers to create and lead these groups. In a clustered randomized evaluation spanning three African countries (Ghana, Malawi, and Uganda), we find that the promotion of these community-...

Introduction One of the most important innovations in development finance in recent years has been the emergence of microfinance. Millions of very poor people receive and repay small loans, even though they possess few assets or skills. At least two decades of experimenting lead donors and practitioners in developing countries to identify and duplicate best practices – just think about the famo...

This paper explores the potential of microfinance in post-conflict economies, and specifically examines policy considerations for the case of Iraq. It presents important conditions of the post-conflict economy, and examines three critical requirements for successful microfinance operations, as outlined by the Microenterprises Best Practices Project. Political stability, economic demand and popu...

BACKGROUND The United Nations Millennium Development Goals include targets for the health of children under five years old. Poor health is linked to poverty and microfinance initiatives are economic interventions that may improve health by breaking the cycle of poverty. However, there is a lack of reliable evidence to support this. In addition, microfinance schemes may have adverse effects on h...

This paper examines how members sort across community-based microfinance groups, specifically Village Savings and Loan Associations in rural Malawi. Our central question is to ask whether such groups allow savers (especially commitment savers) to match with potential borrowers, thereby promoting financial intermediation. We analyse novel data in the form of a census of all 3,800 members of 150 ...

Microfinance Institutions have the potential to alleviate poverty across the world. However, they face many challenges before they can grow to meet set objectives. The use of information technology holds promise to enable such growth. There are some key challenges that must be addressed by microfinance institutions before the full potential of IT can be realized. This paper articulates five key...