Elsevier

World Development

Volume 26, Issue 10, October 1998, Pages 1875-1891
World Development

Microcredit: What can we learn from the past?

https://doi.org/10.1016/S0305-750X(98)00082-5Get rights and content

Abstract

Six microcredit organizations of 19th-century Europe are compared to identify what institutional designs were conducive to success and sustainability. Organizations that depended on charitable funding were more fragile and tended to lose their focus more quickly than those that obtained funds from depositors. An ability to adjust interest rates also appears important in sustainability. Examining historical microcredit is particularly useful since it offers an opportunity to explore the characteristics of organizations which were sustained over many decades, a perspective which is rare in modern microcredit banks and programs, most of which are less than 15 years old.

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  • Cited by (0)

    We would like to thank Francesco Galassi and Tim Guinnane for kindly providing information on the Italian and German cooperative systems, Edward S. Prescott for helpful comments, and the Entrepreneurship Research Alliance at the University of British Columbia and the University of Calgary for financial support.

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