This paper describes some of the main aspects of microfinance (MF) in under-developed countries, showing why it has succeeded in reaching the poor, while traditional banks have not, using innovative devices such as group lending with self-monitoring, short repayments instalments and small loans. The aim of the paper is to show how microfinance institutions (MFIs) can fill the lack of traditional banks in under-developed countries, proposing unconventional products and innovative business models. This study also investigates about possible synergies between banks and MFIs, avoiding overlaps and mission drift. It is shown that MFIs can improve their outreach using technological devices such as M-banking. Innovative questions and proposals are illustrated, so as to give an updated and synthetic picture of the state-of-the-art, which might prove useful for researchers and practitioners.
21Technical or social innovation, concerning also the creation and commercialization of new products, strategies and management, has a deep actual – and especially trendy – impact on microfinance institutions (MFIs), contributing to reshape their business model, with an impact on their overall risk profile. Innovation is mostly an opportunity even for MF risk mitigation, considering its pervasive impact on risk factors. This original analysis is addressing, in a multidisciplinary and innovative comprehensive way, apparently weakly related topics such as MF governance, and IT issues, within recessionary cycles. This hardly investigated frontier faces key trendy issues, which are likely to deeply reengineer the relationship among different stakeholders, as it has already happened, on a different and more sophisticated scale, with traditional banking. To the extent that technology (with access to Internet, social networks, cashless electronic payments, etc.) reshapes the equilibriums among different stakeholders, it is likely to have important – albeit under-investigated – corporate governance consequences, softening the conflicts of interest among stakeholders and reinforcing the business model, making it more resilient during recessions, with positive externalities on both sustainability and outreach.
The poor are typically isolated, lacking opportunities and being deprived of necessary developmental assets such as proper communication and networking. Network theories may thus act as an original starting point for interpreting issues of poverty, which can be alleviated by combining basic technology with affordable funding programs such as microcredit. Value-adding technology, levered by microfinance, may then be sequentially added to the development paradigm. To the extent that technology and microfinance can be suitably combined, they may lever scalable productivity, in a way similar to Metcalfe’s exponential upsides for networking organizations. This may happen for instance with M-banking, within a ‘digital culture’ environment, and with viral social networks, such as Facebook or Twitter, or Mobile Apps.29
La recessione economica, scatenata dalla crisi del sistema bancario e finanziario internazionale, pone nuovi interrogativi sul modo di “fare banca”, in presenza di impieghi in titoli o prestiti alla clientela che hanno evidenziato profili di rischiosità non percepiti prima della crisi e non supportati da un’adeguata patrimonializzazione. Gli investimenti in istituzioni di microfinanza nei paesi in via di sviluppo, tradizionalmente caratterizzati da rendimenti contenuti, hanno dimostrato una scarsa correlazione con i mercati internazionali, con un conseguente limitato profilo di rischio. La forte domanda di finanza etica, anche in risposta ad una generalizzata percezione di crisi di valori, apre nuove strade e mercati scarsamente esplorati, in un’economia sempre più globalizzata in cui problemi e opportunità sono – nel bene e nel male – sempre più condivisi. La microfinanza, una volta adeguatamente sviluppata, può dare un contributo duraturo e che si autoalimenta – come le fonti rinnovabili – alla soluzione della povertà, a differenza delle donazioni che svuotano le tasche dei benefattori per riempire solo temporaneamente quelle dei più bisognosi.
Traditional corporate governance models in Western countries have been severely shaken by the still ongoing recession, whereas in developing countries backward and unrefined stakeholdership models have provided an involuntary shelter from financial shocks.