Title: Reduction of global development cost caused by microfinance inefficiencies

Authors: Tomas Hes; Karel Srnec

Addresses: Institute of Tropics and Subtropics, Czech Agricultural University Prague, Kamycka 129, 165 21, Prague 6, Czech Republic. ' Institute of Tropics and Subtropics, Czech Agricultural University Prague, Kamycka 129, 165 21, Prague 6, Czech Republic

Abstract: The purpose of the paper is to quantify the annual financial losses incurred owing to the lack of global coordination in the international microfinance investment sector, leading to inefficiencies. This paper attempts to examine the scale of idle potentials on the basis of available international investment flow statistics and proposes innovative instruments, arched over in the Global Microfinance Financing Authority (GMFA). As several dramatic inefficiencies are taking place, forming of the proposed body would prevent substantial annual losses, at present absorbed by the clients, raising the cost of capital for the poor.

Keywords: microfinance; funding; inefficiency; coordination; FX risk; guarantee; credit bureau; e-finance; centralisation; development; annual financial losses; electronic finance; international investment flow; foreign exchange; poverty.

DOI: 10.1504/IJEF.2011.043349

International Journal of Electronic Finance, 2011 Vol.5 No.4, pp.374 - 384

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 25 Oct 2011 *

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