Paper
Microcredit: An Institutional Development Opportunity
How understanding microfinance institutions links with other institutions is valuable
15 pages
The development of microcredit programs provides an opportunity to strengthen local institutions. However, research has focused on the design and management of microcredit programs without enough attention to the institutional environment in which microcredit programs operate. This paper argues that:
- Theory offers a framework for understanding the importance of linkages between microcredit programs and local institutions;
- These linkages lead to sustainability;
- Sustainability refers to a net positive flow of benefits to the local community.
The overall conclusion is that microcredit programs embedded in local institutions have the best hope of becoming sustainable.
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