“from small credit to microfinance or how to develop financial diversity”

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“From small credit to microfinance or how to

develop financial diversity”

From small credit to microfinance

Brigitte Maas (DMI, Germany)

Udo Bauer (Nordhand, City of Dortmund)

Christian Baier (Socius, Berlin)

Christophe Guene (SOFI, Brussels)

Berlin, 27 April 2007

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The vicious circle !Strong selectionControl & processHigh cost(High risk)Stronger selectionMore control & processLoss of reputationHigher costs(increase of credit ceilings)Higher riskLower outreach

=

Process control system

Low institutional risk

Legitimacy through procedures

Low output

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The virtuous circle ?High accessOpen processHigh trustLow costLow riskHigh (social) innovation

=

Outcome target system

Legitimacy through efficiency

High institutional uncertainty

High (quality) output

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Forms of Social Capital

Mutual Trust, Friendship, Dependencies, Beliefs, Values, Information, Know-how, Solidarity, Confidence...

... anything that binds people to each otherThe Challenge: how to detect it, how to build on it, how to nurture it ?

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sofi money & banking for Society

Rue de Cureghem, 41-43

B-1000 Brussels, Belgium

Tel +32-(0)2-762 14 31

contact@sofi.be

www.sofi.be