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show that if, (1) the amount that a successful borrower owes for his defaulting partner is optimally determined, and (2) the penalty is allowed to vary across group members, then even in the absence of any social sanctions or cross-reporting, (1) expected borrower welfare is strictly higher with group lending when both group lending and individual lending are feasible and (2) group lending is feasible for a greater range of opportunity cost of capital. These results are robust to collusion between borrowers.” Fifth, knowing that there are sustainable microfinance examples in CEE and developing countries, it is important to know the difference between those regions and Western Europe. According to Molenaar (2009), the key characteristics of microfinance in Western Europe compared to the other regions are; individual loans rather than group-based lending, higher average loan size (around !11.000), tailored business and financial support, general for a longer period, higher average interest rate and in addition to interest, most MFIs in the EU area charge loan application fees, loan processing and interest penalties on top of the interest as a means of covering operational costs. This is most common where MFIs strive for their own self- sustainability. Granger and Lämmerman (2009) argue that comparing microfinance development conditions is impossible, because wealth in the countries is different, as is the concept of involvement of public money in microfinance. Even the concept of the aims and the concept of entrepreneurship as a model for microfinance are different. Finally, within Western Europe, some important players like, Adie in France (based on the Grameen Bank model), are making a short-term objective out of becoming sustainable (Genet, 2009). Adie for example has established six pilot branches called Adigo branches. A person who would like to take out a loan has to gather three other persons who each have an individual business project and need a loan. Each person in the group obtains a loan and needs to show solidarity for the loan repayment of each other member of the group (Granger and Lämmerman, 2009). 3. Aims and objectives The aim of the Thesis Project is to find out how the Dutch microfinance model (used to stimulate entrepreneurship) can be made sustainable. This will be done, by analyzing successful (foreign) examples. Elmar Hoogendoorn 91 Sustainable Microfinance
The Thesis Project has several objectives: • Create an overview of all relevant literature about microfinance (models); • Create an overview of all relevant literature about government stimulating entrepreneurship programs; • Create an benchmark and compare the current Dutch microfinance model; • Conduct interviews with important players in the microfinance sector; • Develop a framework a sustainable microfinance model in the Netherlands. 4. Research question The main question of the Thesis Project is: • How can the Dutch microfinance model (used to stimulate entrepreneurship), be made sustainable, by lessons learned form successful examples? The following are examples of sub questions that will be used to answer the main question: • What relevant microfinance models are or have been used worldwide to stimulate entrepreneurship? • What microfinance model is currently used in the Netherlands? • How does the current model stimulate entrepreneurship? • How is this going to change in the future? • Will it be possible to remain or lower the interest rates? • How do foreign models stimulate entrepreneurship? • When are models successful? • Why are some foreign models successful? • What factors are important for this success? • How is it possible to integrate these factors into the Dutch model? 5. Theoretical and practical relevance Pamela Feleüs from Roosendaal has realized her dream. She was able to start her own hairdresser’s saloon, thanks to the money from the microcredit office West Brabant. Conventional banks did not want to help her, and told her to come back next year. According to Heemskerk is Pamela the hundredth starting entrepreneur that was helped by this form of ‘soft’ loan. The institute providing the loans, Qredit, has Elmar Hoogendoorn 92 Sustainable Microfinance
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! ! Sustainable Microfinance Balanc
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Keywords and Abstract Sustainable M
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Condensed Table of Contents ! ! Key
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3.3 Lessons from previously develop
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List of Figures ! Figure I-1: Thesi
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List of Abbreviations BDS Business
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1. Overview This chapter serves as
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In 2007, the Dutch Ministry of Econ
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collect information or seek specifi
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In some regions entrepreneurs are a
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• What different players in the D
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2. Theory and Literature Review - M
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investors expect to gain from the f
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2.4 Microfinance in (Western) Europ
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A MFI in the survival mode can bare
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The main factors that negatively af
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that are needed in order to transfo
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According to Lämmermann, et al. (2
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2.5.6 Success of BDS Lämmermann, e
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The final conclusion relates to the
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Kaplan and international strategy c
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investments in learning will lead t
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• Derived from strategy; • Stim
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emaining drivers of the model are;
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Greatbanks and Tapp (2007) Manville
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Page 53 and 54: objectives (obligations) establishe
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Page 57 and 58: the use and usefulness of PMSs by s
Page 59 and 60: Figure 4.1: Step model of inductive
Page 61 and 62: 4.5 Methods of Data Collection In o
Page 63 and 64: All eight groups are interesting fo
Page 65 and 66: must take into account with the rel
Page 67 and 68: Section III. Findings and Discussio
Page 69 and 70: KH VS TB RL OE MB CS AP Total App.
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Page 75 and 76: For the model Stefano (2010) propos
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Page 79 and 80: 5.3 Summary Based on the empirical
Page 81 and 82: 6. Discussion 6.1 Introduction This
Page 83 and 84: 6.2.4. Sustainability Entrepreneur
Page 85 and 86: 6.2.9. Network & Business Developme
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Page 89 and 90: • Since the development of microf
Page 91 and 92: 7.2.3 The Model: ‘Equally’ Bala
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Page 95 and 96: Appendix A - Thesis Proposal Accord
Page 97 and 98: 1. Abstract The Thesis Project will
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Page 105 and 106: Based on the results from the liter
Page 107 and 108: 8. Table of contents Preface List o
Page 109 and 110: References Armendáriz, B. 2009, 'M
Page 111 and 112: Work program March April Week numbe
Page 113 and 114: Figure B-2 Simplified Strategy Map
Page 115 and 116: Figure B-5 Comprehensive Performanc
Page 117 and 118: Organizational Development • What
Page 119 and 120: RL start at the core; 'why do you w
Page 121 and 122: Appendix E - Social ! KH jobs creat
Page 123 and 124: Appendix F - Financial ! Liquidity
Page 125 and 126: OE through friends and family and a
Page 127 and 128: MB that has to do with you financia
Page 129 and 130: RL You can test it, by launching fo
Page 131 and 132: Appendix I - Internal Business Proc
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Page 135 and 136: Appendix L - Network ! Professional
Page 137 and 138: Appendix M - Business Development S
Page 139 and 140: Appendix N - General BSC model ! Us
Page 141 and 142: Appendix O - Relation and Link ! Eq
Page 143 and 144: Appendix P - Most Important Financi
Page 145 and 146: Appendix R - Sustainability of Micr
Page 147 and 148: Appendix S - Qredits ! KH The main
Page 149 and 150: Bibliography Affleck, A. and Mellor
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the case of the tourism industry,
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Kunc, M. (2008), 'Using systems thi
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McKinsey & Company, p. 3., Availabl
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Shrader, C.B., Mulford, C.L. and Bl
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Woodworth, W. and Woller, G. (1999)
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