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Micro-credit and Micro-equity: The David and the Goliath of Micro-enterprise Financing.

Authors :
Ayayi, Ayi Gavriel
Source :
Economic Papers; Jun2012, Vol. 31 Issue 2, p244-254, 11p
Publication Year :
2012

Abstract

I argue that micro-equity may be used to complement or substitute micro-credit programmes, which involve lending rather than risk sharing. By becoming a stockholder in the micro-enterprise rather than a lender, the micro-equity provider is in a more tightly coupled relationship, providing knowledge and guidance necessary for ensuring success of the venture. Moreover, I show that while micro-credit financing places a heavy cash drain on micro-enterprises and leads to sub-optimal growth during the course of the evolution of the micro-enterprise, the mix of micro-equity with micro-credit may prove to be more valuable to nurture the sustainable growth of micro-enterprises. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
08120439
Volume :
31
Issue :
2
Database :
Complementary Index
Journal :
Economic Papers
Publication Type :
Academic Journal
Accession number :
77385639
Full Text :
https://doi.org/10.1111/j.1759-3441.2011.00144.x