Doing Bad by Doing Good? Theft and Abuse by Lenders in the Microfinance Markets of Uganda

摘要

Microcredit transactions in developing countries create risks for borrowers that are routinely overlooked in the literature. This paper argues that common microfinance-lending methodologies that allow lenders to collateralize loans and unilaterally collect this security create opportunities for malicious lenders to steal from clients in good standing. In places where any lender can simply call itself a "microfinance institution" (MFI), opportunistic lenders can use the halo effect associated with microfinance to encourage borrowers to make themselves unusually vulnerable to theft. Evidence of these abuses can be seen in a case study of Uganda, where theft and fraud by a small number of microfinance institutions created a large-scale crisis and contributed to a precipitous decline in trust in the financial sector as a whole. Even when it occurs only on the margins of the sector, I conclude, this type of opportunism may have problematic implications for all MFIs and undermine efforts to increase financial inclusion. This possibility provides a new impetus to consider innovative regulatory approaches for microfinance.