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Modalities of Microfinance Delivery in Asia and Latin America: Lessons for China
Author(s) -
Montgomery Heather,
Weiss John
Publication year - 2006
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2006.00006.x
Subject(s) - microfinance , outreach , china , latin americans , poverty , government (linguistics) , financial services , modalities , economics , business , financial system , development economics , economic growth , political science , finance , sociology , social science , linguistics , philosophy , law
Microfinance, the provision of small size loans and other financial services to low income households, is often seen as the key innovation of the last 25 years in terms of means of reaching out to the poor and vulnerable. There is extensive experience in microfinance provision in both Asia and Latin America, but as yet relatively little use of the approach in China. This paper assesses different approaches to microfinance delivery using a threefold distinction, the credit union approach, the non‐government organization approach and the banking approach, to generalize across recent Asian and Latin American experience and discuss the role of microfinance in poverty reduction in a theoretical framework. Considering the current state of microfinance in China and international experience, we suggest the banking approach as the way to best increase outreach of micro‐financial services in China. (Edited by Xiaoming Feng)