a r t i c l e i n f o The expansion of microfinance has triggered concerns of rising indebtedness, and higher default and interest rates. Using a screening model, we show that even if interest and default rates increase due to expansion, borrower welfare may improve. This is because: (i) all borrowers previously denied credit can obtain loans, and (ii) screening costs for pre-existing borrowers...

This paper compares, for a microfinance institution, the performance of two individual classification models: Logistic Regression (Logit) and Multi-Layer Perceptron Neural Network (MLP), to evaluate the credit risk problem and discriminate good creditors from bad ones. Credit scoring systems are currently in common use by numerous financial institutions worldwide. However, credit scoring using ...

The increasing importance of Information Systems (IS) in the global economy prompts microfinance researchers to view the industry from an interdisciplinary perspective. A review paper for microfinance from the IS perspective will create a firm foundation for advancing knowledge. It will facilitate theory development, close areas where a plethora of research exists, and uncover areas where resea...

REQUIRED) A decade ago, the microfinance industry prided itself on its trends toward financial and operational sustainability. Recently, investors, donors, lenders, regulators, and microfinance institutions have been more concerned with social and outreach performance. Transactions cost and distance theories inform a new ICT-enabled microfinance institution (MFI) outreach theory positing that i...

Despite global recognition and sufficient history of microfinance there is mixed evidence of its net benefits and very limited empirical work on its contribution to financial intermediation and economic growth. Addressing this gap we aim to reveal whether and how microfinance is transferred to growth. Our conceptual approach is based on a broader finance-and-growth nexus where microfinance is s...

March 2005 57 Bindu Ananth is a Manager at ICICI Bank. She has worked in ICICI Bank's microfinance practice for over three years and is currently the co-ordinator of the Centre for MicroFinance Research. The views presented in this paper are solely those of the author and do not in any way reflect the views of ICICI Bank. Capital constraint is an issue impeding scaling up of microfinance in Ind...

Microfinance is widely hailed as a sustainable approach to global poverty reduction, particularly among women who are over-represented among the world’s poor and often lack access to traditional labor markets and financial instruments. In this regard, evidence suggests that microfinance positively affects women’s empowerment, social capital, and economic conditions. However, there is considerab...

This paper provides a quantitative evaluation of the aggregate and distributional impacts of economy-wide microfinance or credit programs targeted toward small-scale businesses. In our analysis, we find that the redistributive impacts of microfinance are stronger in general equilibrium than in partial equilibrium, but the aggregate impacts are smaller. Making the typical microfinance program mo...

The organization, technology and operation of microfinance have undergone much change and differentiation. Muhammad Yunus, a Nobel-prize winner first demonstrated the possible empowerment of poor people by means of microfinance. Even so, certain cases have indicated that this empowerment does not necessarily occur and that microfinance can even be damaging. In this paper, we describe a case stu...