Journal of Microfinance / ESR Review


Microfinance institutions (MFIs) established to provide the poor with access to capital have typically operated outside of their countries' regulated banking environments. Many have relied on donor grants and low-interest funds to support loan portfolios and social programs. As MFIs mature they aspire to become more efficient and attain economic sustainability because hey understand that greater numbers of the poor can be serviced by economically sustainable institutions. Many MFIs collect savings deposits but are often barred from using them for loans by their countries' laws. Fonkoze, an MFI in Haiti, has sought regulated status, which would provide access to deposit assets and enable Fonkoze to better compete with other MFIs, some of which are regulated subsidiaries of commercial banks. In the midst of political and economic turmoil, Haiti's Central Bank has delayed Fonkoze's transformation. A different solution is now moving forward, with Fonkoze becoming two entities, Fonkoze Financial Services and Fonkoze Foundation.


Michael Tucker is a Professor of Finance at Fairfield University in Fairfield, Connecticut.; Winston Tellis is a Professor of Information Systems and Operations Management at Fairfield University, in Fairfield, Connecticut.



Journal Title

Journal of Microfinance

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