Título en español: Reseña del libro The economics of microfinance, por Beatriz Armendáriz de Aghion y Jonathan Morduch.

Bibliografía p.

The book by Armendáriz and Morduch focuses on how microfinance institutions work, what has been their impact and whether they are financially sustainable. For such purpose the book can be divided—from my viewpoint—into six sections. The first describes the environment of imperfect information that surrounds credit transactions and the consequences that this entails. First the authors define in a simple and clear manner the concepts of adverse selection and moral hazard. Then they explain how under such a context the demand for loans—of small size—by populations that do not have much collateral and whose income level and stability is difficult to corroborate, leaves traditional formal financial institutions (i.e. banks) having little incentives to satisfy such demands.

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