Private Enterprise and Financial Markets > Micro, Small and Medium Enterprise
Micro Enterprise, Development Review Vol.8 No.2
By SDS/MSM (12/05, En, Es)
Latin American banks make consumer loans based on "high-tech" automated credit scoring, whereas microfinance lenders make microenterprise loans based on "high-touch" individualized analysis of cash flows and personal character. What can these two approaches learn from each other? In the first article, Mark Schreiner (Director of Microfinance Risk Management) and Hans Dellien (Manager of Microlending Services for Women's World Banking) explore the answers to this question drawing on experience from an IDB-funded project with affiliates of Women's World Banking in Colombia and Dominican Republic. The article emphasizes on the practical steps that need to be followed for the successful introduction of credit scoring in microfinance operations.
In the second article, Glenn Westley, Microfinance Senior Advisor in the Micro, Small and Medium Enterprise Division at the Inter American Development Bank, explores the alternatives that microfinance institutions face when deciding how to best fund themselves: issue stock, issue bonds, obtain commercial or concessionary loans, and mobilize savings. The article explores the trends in usage, costs, and relative merits of each alternative method of finance, how best to combine them, and what are the best practices associated with using each.
Last updated: 06/13/07
