Thesis (M.S.)--University of Wyoming, 2007. / Title from PDF title page (viewed on July 22, 2009). Includes bibliographical references (p. 28).

Thesis (MTech (Internal Auditing))--Cape Peninsula University of Technology, 2015. / Approximately 57% of the total population in South Africa lives under the poverty line. In this regard, Small, Medium and Micro Enterprises (SMMEs) which provide microfinance play a vital role to provide access for poor households to banking-related financial services. This service can only be delivered sustainably through means of deploying effective management practices, especially in terms of risk management. The purpose of this research is to identify risks faced by microfinance SMMEs and to establish the effectiveness of the current risk management practices deployed by them. This study aims at increasing the knowledge base and understanding of risk management practices by conducting a comprehensive literature review and field research. In order to establish a theoretical basis, a comprehensive literature review was performed and prior studies on various aspects relating to microfinance risk management were investigated. This was followed by a field research which studied the risk management of microfinance providers in the Cape Metropole; large financial service providers like commercials banks were excluded. Data were collected by means of a questionnaire from microfinance providers in the Cape Metropole. These microfinance providers were drawn from a list of credit providers that was obtained from the National Credit Regulator (NCR) public domain. A purposive sampling method was used to select the participants for this study. The information provided by participants is kept strictly confidential and anonymity of all respondents was guaranteed. This research noted that collaterals are absent in microfinance and instead, a close connection between microfinance SMMEs and their clients come into place. Risk management frameworks which provide an all-inclusive approach to risk management are largely absent in microfinance SMMEs. Much fewer microfinance SMMEs actively identify risks, categorise, prioritise and document them appropriately. The research further showed that the views on risk management depend on whether the respondent is an owner or a manager of the enterprise.

L’offerta di servizi di microcredito da parte di istituzioni di microfinanza contribuisce ad aumentare l’accesso al credito di una clientela rurale ed accrescere l’efficienza dei mercati locali del credito? Questo studio prova a rispondere alla precedente domanda attraverso lo sviluppo di un modello teorico e l’analisi empirica sulla base di dati raccolti in un villaggio dell’Etiopia. In un mercato finanziario duale (formale/informale), il modello teorico indica che, nonostante non tutti i membri dell’ accordo informale ottengano un microcredito dall’intermediario formale, ogni membro dell’istituzione informale ne beneficia. Infatti, i membri che si trovano in condizione di deficit finanziario beneficiano direttamente di maggiori risorse derivanti dal prestito mentre gli altri membri godono di vincoli di partecipazione meno stringenti. Inoltre, quando il tasso di interesse sui prestiti formali si riduce, aumenta sia l’utilità dei prenditori di fondi che quella di tutti gli altri membri dell’istituzione informale. Gli intermediari formali sottraggono mercato alle istituzioni informali in una misura che dipende dall’ammontare del microcredito e dal tasso di interesse. I dati raccolti nel villaggio rurale etiope confermano solo parzialmente le considerazioni teoriche. In primo luogo, a causa di un diverso ammontare e di una diversa scadenza dei prestiti formali rispetto a quelli informali, nel villaggio i due mercati sembrano complementari. In secondo luogo, l’approccio del prestito di gruppo sembra replicare gli stessi processi di monitoraggio e selezione delle istituzioni informali e pertanto le famiglie a basso reddito rimangono vincolate nell’accesso al credito. In conclusione, se le istituzioni di microfinanza volessero operare con successo nelle aree rurali, dovrebbero, per prima cosa, studiare i processi di selezione dei membri all’interno delle istituzioni informali e, per seconda cosa, offrire una più ampia gamma di prodotti finanziari oltre al credito, come ad esempio prodotti di risparmio e prodotti assicurativi. / Does the provision of formal microcredit increase access to credit of rural clients and efficiency of credit markets? This study tackles this question through the development of a theoretical model and an empirical analysis in an Ethiopian village. In a dual (formal/informal) financial market, the theoretical model suggests that when some members of the informal arrangement get a formal loan, all members benefit from it. The agents who have a current deficit have greater financial resources whereas the agents who have an expected future deficit enjoy looser participation constraints. Furthermore, when the interest rate charged on formal loans decreases, the utility of not only borrowing members but all members in the arrangement increases. Besides, the formal market crowds out the informal market to some extent as long as the formal loan size increases or the interest rate decreases. Evidence from the rural village in southern Ethiopia only weakly confirms the theoretical results because of two reasons. First, due to different size and maturity of loans, the formal microcredit services and the informal risk sharing arrangements appear to be complements in the local market. Second, the group lending approach seems to replicate the same selection and monitoring processes of the informal arrangements and the low-income households remain constrained in their access to credit. Therefore, MFIs that want to operate successfully in rural areas should, first, make an assessment of self-selection processes in the informal arrangements and, second, provide a wider range of financial products besides credit, such as savings and insurance products.