Sustainable Microfinance - Balanced Scorecard's added value for ...

1. Abstract
The Thesis Project will focus on the practice of microfinance in the Netherland to
stimulate entrepreneurship. It will create an overview of different microfinance models
currently in practice. It will pay special attention to those models currently sustainable
and independent of external finance. After extensive literature review, a benchmark
will be created to develop a framework for a sustainable microfinance model. An
inductive research, by interviews, will be conducted to finalize the framework by
analyzing the views of, journalists, entrepreneurs, professors and other parties
involved. The results, a framework for a sustainable model, will be useful for all
parties involved in the microfinance process in the Netherlands.
2. Background
Microfinance in developing countries
Initially, most developing countries accepted microfinance as an instrument to
combat poverty. Then it was acclaimed as an instrument to boost entrepreneurial
initiatives. Subsequently, microfinance institutions (MFIs) developed comprehensive
programs offering a wider range of products and services to micro-entrepreneurs.
Now, the sector is considered an industry, and legalization and regulatory
frameworks are developed and introduced in support of the sector (Molenaar, 2009).
Microfinance in Central and Eastern Europe
According to the European Microfinance Network (EMN) the state of microfinance in
Central and Eastern Europe (CEE) and the New Independent States (NIS) is much
more developed than in Western Europe (Evers and Jung, 2005). In CEE
microfinance began as an economic development tool after the fall of the Berlin Wall.
Within 5 or 6 years, microfinance institutions in CEE and in the NIS had attracted
more than 1.7m borrowers and 2.3m depositors, with an average client growth rate of
30% per year (European Investment Fund (EIF), 2009).
The Microfinance Centre (MFC) (for CEE and the NIS) has developed the Strategic
Management Toolkit to help MFIs professionalize their strategic management
processes and improve their double bottom line. The toolkit minimizes the risk of
mission drift for those MFIs, which grow fast, transform themselves into regulated
institutions, and/or compete aggressively with other market players (MFC, 2007).
Elmar Hoogendoorn 86
Sustainable Microfinance