| BRUSSELS 2007! Workshop 5: "Credit for the “Poor”: Microlending or Bank Loans?" - Initial comments by Prof. Leo Verhoef |
W5: CREDIT FOR THE “POOR”: MICRO-LENDING OR BANK LOANS?
Comments and issues to be raised by Prof. Leo Verhoef:
The word “poor" suggests, that we are dealing with a target group of permanently, financially disabled people. In my belief everybody asking for finance is financially disabled, although temporarily. This view should also be taken in respect to people, without financial and commercial experience asking for a low amount of money. The contradiction micro lending or bank loans in that respect have only to deal with the type of financers. The reason that many banks are not involved in micro lending is that they are disabled, being that they do not posses the systems to offer commercially interesting lower amounts of money with additional advice. However, I believe that banks who are or become more creative and innovative will also be in a position to serve this target group the same way as specialists in the field of micro lending, such as ADIE, and even make profit on it, especially with new and better rating systems, more efficient handling processes, better co-operation with organisations offering advice. This will also be my main thesis. My second thesis is that banks willing to enter this market should have different account managers dealing with the target group (as they also do for equity funds within the bank), because another attitude that with regular banking is required. ADIE and similar organisations should help banks to train these sorts of account managers for regular banks. |
| ID: |
40131 |
| Author(s): |
iff |
| Publication date: |
13/09/07 |
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Created: 03/09/07. Last changed: 09/03/11.
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