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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Capacity Constraints, Management and Effectiveness of Poverty-Oriented Microfinance Institutions in Malawi
Authors:Chirwa, Ephraim W.ISNI
Mvula, Peter M.ISNI
Namata, LucyISNI
Zgovu, Evious K.
Year:1999
Periodical:African Review of Money, Finance and Banking - Supplement to 'Savings and Development'
Pages:21-48
Language:English
Geographic term:Malawi
Subjects:credit
poverty
Economics and Trade
Development and Technology
External link:https://www.jstor.org/stable/23026370
Abstract:The problems of access to formal credit markets by the poor have prompted interventions in microfinance in developing countries. In Malawi, under the Social Dimension of Adjustment (SDA) project, the government provided capital to six institutions to implement credit schemes for the poor on a pilot basis. This paper examines the capacity constraints and effectiveness of the six poverty-oriented institutions that received grants. It reviews innovations in rural financial services, presents the study's methodology and a brief profile of the six institutions, compares the design of the credit programmes (type of services, target groups, and lending policies), analyses the capacity constraints facing the institutions and the implications for effectiveness in reaching the poor, and draws some lessons. Capacity constraints relate to governance and management, human, physical, and financial resources. The credit schemes are far from being self-sufficient. Their expansion is likely to be donor dependent. The failure of the pilot credit programmes can be explained in terms of institutional capacity constraints including poor management, inadequate personnel, limited branch networks and transport facilities, poor management information systems, and lack of accountability and transparency. The design of programmes should be based on long-term sustainability without continued donor fund injections. Secondly, more attention should be given to institutional development. App., bibliogr., notes, ref., sum. in English and French.
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