TY - BOOK ID - 138904381 TI - Microfinance Meets the Market AU - Cull, Robert AU - Demirguc-Kunt, Asli AU - Morduch, Jonathan PY - 2008 PB - Washington, D.C., The World Bank, DB - UniCat KW - Access to Finance KW - Access to financial services KW - Asymmetric information KW - Banking services KW - Banks & Banking Reform KW - Debt Markets KW - Emerging Markets KW - Finance and Financial Sector Development KW - Financial markets KW - International bank KW - Loan KW - Loan repayment KW - Microfinance KW - Microfinance institutions KW - Private Sector Development KW - Transaction costs UR - https://www.unicat.be/uniCat?func=search&query=sysid:138904381 AB - Microfinance institutions have proved the possibility of providing reliable banking services to poor customers. Their second aim is to do so in a commercially-viable way. This paper analyzes the tensions and opportunities of microfinance as it embraces the market, drawing on a data set that includes 346 of the world's leading microfinance institutions and covers nearly 18 million active borrowers. The data show remarkable successes in maintaining high rates of loan repayment, but the data also suggest that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women. Those institutions, as a group, charge their customers the highest fees in the sample but also face particularly high transaction costs, in part due to small transaction sizes. Innovations to overcome the well-known problems of asymmetric information in financial markets were a triumph, but further innovation is needed to overcome the challenges of high costs. ER -