Journal of Microfinance / ESR Review


Benson Honig


Loan programs in two different countries, Israel and Jamaica, are compared and contrasted, in order to identify common elements of project design, selection, and institutional norms. Utilizing agency theory, this article examines what types of borrowers successfully navigate the credit market and to what extent the bureaucratic processes employed by institutions influence and bias outcomes in unpredicted ways in organizations. Entrepreneurs are well recognized as coming from a wide range of backgrounds; indeed, it is the very heterogeneity of their origins that allows many to provide the newness of perspective so necessary for their activities. However, hidden or tacit institutional biases were found to work against this diversity, limiting severely the impact of efforts to sustain an entrepreneurial culture and to promote economic development. The characteristics of the lowest level of organizational actor(s) were found to differentiate successful innovation from unsuccessful attempts. Selection of the appropriate staff was found not only to influence the quality and nature of the tasks assigned, but also the very direction and choice as to exactly what the organization would do.



Journal Title

Journal of Microfinance

Issue and Volume