Business Commons^™

Savings Account For Microenterprise, Meghan Jarow

Honors College Theses

Will bundling savings accounts with loans increase the effectiveness of microfinance as a tool for alleviating poverty? Microfinance is the practice of offering small loans to poor people in developing countries. The development of this practice into a poverty dimishining, self-sustaining business won Muhammad Yunus a Nobel Prize in 2006. Today, there are thousands of microfinance institutions (MFIs) serving millions of people in developing countries. However, there is recent evidence that these loans do not help reduce poverty, and may do as much ahrm as good.

In truth providing credit to the poor may not be enough to eliminate poverty. …

Are Credit Unions In Ecuador Achieving Economies Of Scale?, Nick A. Marchio

Economics Honors Projects

This study tests the assertion that membership growth in credit unions is constrained by their unique structural features, such as their non-profit mission and member-based ownership. Although these features enhance inclusiveness, existing theory suggest that they work against efficiency when membership grows too diffuse. To address this issue, this study uses a model that takes into account existing theory on constrained-optimization in credit unions and theory on the adverse effects of diffuse ownership. Using data on 36 public credit unions in Ecuador, the empirical analysis finds evidence that credit unions can achieve economies of scale despite their problematic structural features. …