The cost of ownership in microfinance organizations
Journal article, Peer reviewed
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Original versionMersland, R. (2009). The Cost of Ownership in Microfinance Organizations. World Development, 37(2), 469-478. doi: DOI 10.1016/j.worlddev.2008.03.006
We compare the ownership-cost of shareholders firms (SHFs), non-profit organizations (NPOs), and cooperatives (COOPs) invoked in microfinance. A paradoxical situation motivates us: most providers, both historically and today, are NPOs or COOPS,while policy papers advocate SHFs, We lay out it theoretical framework to understand ownership-costs in microfinance organizations (MFOs) better. We propose that cost-variable related to market contracting favor NPOs and COOPS, whereas most cost-variables related to the practice of ownership favor SH VS. We conclude that what best serves the customers is the coexistence of of ownership types and call for empirical research to test this theory. (C) 2008 Elsevier Ltd. All rights reserved.
Accepted version of article published in the journal: World Development Published version available on Science Direct: http://dx.doi.org/10.1016j.worlddev.2008.03.006