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This paper is organized as follows: this introduction is followed by a primer on the industry and on the evolution of the microfinance sector. The authors then examine the structure of the microfinance industry, (a) NGOs, cooperatives and credit unions, and commercialized vehicles; how they differ and why corporate governance differs according to the nature of the MFI; and (b) large networks, investment and bank-holding groups, and social services/faith-based groups. The authors then consider how corporate governance evolves and develops in MFIs as their structure and ownership changes. This is followed by an examination of the recurring issues and growing risks in the microfinance industry. The authors conclude with a look at the responses of governments, investors, and the industry itself to these issues and risks and propose some next steps.

The purpose of the paper is to present a more granular view of such projects through the in-depth focus on a limited number of case studies, with a view to understanding what factors in the design of such lending have helped achieve objectives of expanded access, and what forms of interventions may have been less successful. It examines the nature of Bank lending vehicles, the partnering borrower institutions, the country environments in which its loans were extended, as well as broader elements of good practice that make for loan success. It examines the beneficiaries targeted and results achieved. It aims to draws lessons that suggest what factors could lead to success or failure in Bank operations focused on financial access. The remainder of the paper is organized as follows: section two briefly describes the set of the Bank s projects selected for detailed review. Sections three to six contain the core findings of the review. Section 3 focuses on alternative forms of borrower institutions that have served as vehicles for Bank projects, particularly, public sector banks, apex bank structures that include the private sector, rural banks, nonbanks, non-governmental organizations (NGOs) and microfinance institutions, in terms of the degree to which the Bank has been able to successfully partner with such institutions to expand financial access. It also looks at alternative forms of Bank loan design, policy-based loans, investment loans and lines of credit, Learning and Innovation Loans (LILs), matching grants, technical assistance and combinations thereof, and reviews evidence on the role of loan structure (including partnerships with other donors/lenders) and project success. Section four considers the effect of the broader business environment, in terms of financial regulation. Section five reviews elements of good practice that have contributed to success in lending that could be applicable to loans with any objective, and examines their application in the present context. Section six tries to construct a bottom line, reviewing available evidence on outcomes and impact; especially in terms of the ultimate beneficiaries reached. Section seven, the final section, summarizes the main messages emerging from the review and concludes with observations about ways forward.

The percentage of smallholders with access to finance is equally difficult to quantify. According to estimates, even promising approaches to expanding smallholder lending, such as value chain finance, are reaching fewer than 10 percent of smallholders, primarily those in well-established value chains dedicated to higher value cash crops. International Finance Corporation (IFC) has been engaged for several years in learning efforts through diverse partnerships to obtain insights into the challenges of agricultural finance. The evidence of microfinance institution (MFI) involvement in financing commercial and semi-commercial smallholders remains anecdotal and lacks specifics on what makes MFI lending to these segments feasible, and what restricts their reach and effectiveness. This IFC study aims to identify and disseminate lessons emerging from the work of MFIs that have implemented agricultural operations targeting agricultural smallholders in Latin America and the Caribbean (LAC) to support replication and expansion of scalable approaches. Through this research, IFC seeks to understand the motivations of MFIs that venture into agricultural finance, how the products they offer have been structured, and how they were implemented, with a specific focus on agricultural finance programs, and products that are designed for smallholders in loose value chains and non-commercial (subsistence) farmers.

xiv,146p,ills., The study was designed to examine the contribution of Kakum Rural Bank (KRB) to poverty reduction in the Komenda-Edina-Eguafo-Abrem Municipality. All the four agencies of the KRB in the KEEA municipality were included in the study. The purposive, quota and systematic sampling techniques were used to draw 384 respondents, made up of staff and customers of Kakum Rural Bank, for the study. Structured questionnaires were used to collect data from respondents. Percentages, frequencies, graphs, charts as well as descriptive statistics were used to present the data. The results of the study revealed that KRB, with its financial and nonfinancial services, had helped in poverty reduction in the KEEA Municipality. The study further showed a significant improvement in customers’ income level; output level; savings level, ability to afford medical care; ability to cater for the educational needs of family; ability to afford good shelter; provision of nutritious food for family; and acquisition of assets/properties. Despite its contribution towards poverty reduction, KRB was faced with some challenges which included high loan default rate. On the other hand, some of the challenges faced by customers included low interest on savings and high interest rates on loans. Judging from the potential KRB has in reducing poverty, it is recommended that the bank should strengthen its loan recovery effort and expand its coverage in the municipality. Depositors should also receive realistic interest on their deposits. Interest rate on credit should also be lowered.

This is the final consolidated report of an extensive program to assess the financial performance and capacity building needs of the UPK Revolving Loan Funds under the PNPM Mandiri project. As explained in the report, the assessment program covered 508 rural and urban UPKs in the provinces of Central Java, Yogyakarta, Nusa Tenggara Timor and West Sumatra. The aim was to cover 30 percent of rural UPK RLFs in these four provinces and 10 percent of the urban UPKs in order to establish the achievements and determine areas of improvement to enable these UPKs to provide a better service to the low income families in their operational areas. This report covers all 267 rural UPK RLFs and 241 urban UPKs identified for the purpose in the four provinces.

This technical note on access to finance addresses six questions: 1) what is the access to and use of financial services in the Philippines, how does it vary, and how does it compare to other countries? 2) What financial services are available to different market segments? 3) How do different categories of financial institutions contribute to outreach, and what is their potential to expand outreach? 4) How does the regulatory environment support access to finance? 5) What financial infrastructure is available to make credit decisions? 6) What are the results of government policies or programs to promote access to financial services? The note concludes with recommendations to improve access to finance. An estimated 30 percent of Filipinos use formal financial services. This is lower than the East Asia region average. Access to finance has improved since the 2002 Financial Sector Assessment Program (FSAP). The provision of financial services to low-income individuals has expanded. The Philippines has received international recognition for its favorable regulatory policies to promote pioneering use of mobile payments technology and its microfinance regulatory framework.

This case study describes the history and business model of the Rural and Community Bank (RCB) network in Ghana, analyzes its performance, identifies key issues, and makes recommendations on the way forward. The study analyzes the service delivery and financial performance of the RCBs. Before the establishment of RCBs in the late 1970s and the subsequent expansion of other service providers into rural areas, access to institutional credit for farm and nonfarm activities was scarce. The main sources of credit were moneylenders and traders that charged very high interest rates. In many rural communities, secure, safe, and convenient savings and payment facilities hardly existed. The first RCB was established in a farming community in the central region of Ghana in 1976. Rural communities showed tremendous interested in the community ownership and management features of RCBs, and by 1984 the number of RCBs reached 106. The introduction of a check payment system for cocoa farmers also spurred the establishment of local banks in many communities. The financial performance of many RCBs started to decline, however, for several reasons, including a drought that affected the country in 1983, weak governing ability, conflicts within boards of directors, and ineffective management in many RCBs. By the end of 2008, 127 RCBs were in operation with a total 584 service outlets. RCBs are regulated by Ghana's central bank, the Bank of Ghana, and thereby form part of the country's regulated financial sector. RCBs are the largest providers of formal financial services in rural areas and represent about half of the total banking outlets in Ghana.

x, 90p. :ill., The aim of the study was to ascertain how the introduction of microfinance programs by the Lower Pra Rural Bank in the rural areas of their catchment area has helped to alleviate the poverty situation in the Shama, Mpohor Wassa East Districts and Sekondi-Takoradi Metropolitan Area. It was also to establish whether or not the program has had any effects on the business operations of the beneficiaries and their livelihoods. In all 10 groups were sampled out of which 60 respondents made up six members from each group were selected. The books of the bank were also examined to ascertain the number of people who have benefited from the program between 2004 and 2008. The data was analyzed using the Statistical Products and Services Solutions (SPSS). The statistical tools employed in analyzing the data were cross tabulation, frequencies and percentages. The results indicate that there have been some improvements in the living standards of the households of people who have joined the microfinance scheme. There have also been improvements in the business operations of the beneficiaries. It is recommended that the bank should increase its lending program to other economic sectors, especially agriculture and other cottage industries in the district. Non-governmental Organizations and the local authorities must also get involved by offering grants to the others who are unable to access the bank’s programs.

Credit risk assessment for secured loans is an important operation in banking systems to ensure the lenders pay the loans on schedule and to classify the bank as a well performing bank due to regulation. This paper aims to identify factors which are necessary for a rural bank (Bank Perkreditan Rakyat) to assess credit application. By aiming on the reduction of number of non-performing loans, current decision criteria on credit risk assessment are evaluated. Subsequently, a decision tree model is proposed by applying data mining methodology. The credit risk assessment model is applied to PT BPR X in Bali that had 1082 lenders (11.99%) who had non-performing loans and were identified as bad loan cases. This made PT BPR X was categorized as a poorly performing bank. Data mining is used to suggest a decision tree model for credit assessment as it can indicate whether the request of lenders can be classified as performing or non-performing loans risk. Using C 5.0 methodology, a new decision tree model is generated. This model suggests that new criteria in analyzing the loan application. The evaluation results show that if this model is applied, PT BPR X can reduce non-performing loans to less than 5% and the bank can be classified as a well performing bank.

Workshop 2013 on Dynamic and Network DEA (January 29-30, 2013), For revealing the influence of intermediate transactions between industrial sectors to the dynamic performance, this paper develops a framework of dynamic performance with network structure measurement by establishing a dynamic network Malmquist productivity index (DNMPI) model following the dynamic network slacks-based measure (DNSBM) model. In order to explore the performance, we decompose the model to identify the dynamic efficiency (inter-temporal influence) and the network efficiency (sector interaction) based on green accounting. Furthermore, this paper analyzes Chinese dynamic performance with network structure influenced by energy-economy-environment (3E) in the view of industrial chain effect. We apply it to analyze the data of 40 industrial sectors in China from 2002, 2005 and 2007. Based on empirical results, we systematically indicate the influence of energy efficiency and environment efficiency to the economic development in China., This workshop is supported by JSPS KAKENHI Grant Number 22310096 under the title “Theory and Applications of Dynamic DEA with Network Structure.”