The Fate of Microfinance Institutions as a Development Strategy

Abstract

Microfinance is commonly used as a development strategy to help alleviate poverty across the globe. Microfinance has become more widespread and popular in the past decade, particularly in Latin America. This thesis outlines several variables of microfinance and how these variables affect the sustainability of microfinance institutions. The variables of microfinance analyzed in this thesis are: loan conditions, level of competition, type of microfinance institution, country, outreach, and gender. A meta-analysis study in the form of a literature review was performed in order to assess the relationship between each of these variables and the sustainability of microfinance institutions. The analysis concludes that the type of microfinance institution, specifically retail banks, is intimately linked to the sustainability of microfinance institutions in Latin America.