Corporate Values and Transformation: The Micro lender Compartamos Case Solution
Financing, defined as tiny loans advanced to quite low income entrepreneurs, has brought broad interest as a potentially powerful means to assist the economic development of impoverished countries. This case focuses on among the biggest and most successful of such microlenders, Mexico's Compartamos ("we share") organization, and raises questions about the best business model and scale of microlenders. Particularly, the case tells the story of Compartamos, which had found great success making small loans in rural areas and hamlets, do when it sought to grow into Mexico City.
A string of reverses--higher default rates, staff problems, and sudden competition and regulatory dilemmas--implicitly present the question of whether Compartamos and microlenders of its kind, which historically have relied on peer group pressure to ensure repayment of otherwise unsecured loans to small-scale startup companies, can expand and adjust to an urban setting. HKS Case Number 1761.0
This is just an excerpt. This case is about FINANCE & ACCOUNTING
PUBLICATION DATE: June 01, 2004
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