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Evolution of Micro Finance

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Evolution of Micro Finance
EREPLICATION: IS THE SEARCH FOR BEST MODELS IN MICROFINANCE INHIBITING INNOVATION AND INSTITUTIONAL LEARNING?

A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Master of Arts in Development Management and Public Policy

By

Lisa Anne Stein, M.A.

Washington, DC April 14, 2008

REPLICATION: Is the search for best models in microfinance inhibiting innovation and institutional learning? Lisa Stein Student, M.A. Thesis Advisor: Mark Rom, Ph.D. ABSTRACT The search for the right way to bring opportunity and sustainable development to the underprivileged parts of the world has led to efforts to move beyond the concept of traditional charity and has begun to encompass ideas that work with the people and for the people. The microcredit solution was created as such a model. This thesis contributes to the development of the field of microcredit by providing research on the way institutions copy one another in the search for best practices and a working models. It specifically looks at the way microcredit institutions replicate established methodologies in an effort to scale up numbers of people being reached as beneficiaries of microfinance. This would allow to reduce the overhead cost of researching and developing new programs and allows for quick replication around the world. There is speculation that replication suppresses innovation and learning within the organizations and the field as a whole. It is believed that institutional performance is being largely conditioned and stagnated by objectives that concentrate on numbers and quantitative results as opposed to the original mission of achieving a significant social impact.

ii

I examine three of the pioneering microcredit institutions: ACCIÓN International, Grameen Bank (with a look at Grameen Trust and Grameen Foundation) and FINCA International. Experiences of other institutions and


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Schoenholtz, Andrew I. “The I.M.F. in Africa: Unnecessary and Undesirable Western Restraints on Development.” The Journal of Modern African Studies 25:3 (1987): 403-433. Seibel, Hans Deiter and Dolores Torres. “Are Grameen Replicators Sustainable, and Do They Reach the Poor? The Case of CARD Rural Bank in the Philippines.” Rural Finance Working Paper No. B1: (1999). 70 Shoresman, Michelle. “From Bangladesh and Bolivia to the United States: Replicating Successful Microfinance Programs.” University of Washington (2000). 1-39. Stemper, Gloria Almeyda. “Commercial Banks and Women Microentrepreneurs in Latin America.” Microfinance- Evolution, Achievements and Challenges. Ed. Malcolm Harper. London: ITDG, 2003. 109-120. Strang, David and Sarah A. Soule. “Diffusion in Organizations and Social Movements: From Hybrid Corn to Poison Pills.” Annual Review of Sociology 24 (1998): 265290. 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