Doing good by doing well? Microfinance, self-regulation and borrower’s over-indebtedness in the Dominican Republic

Joana Da Silva Afonso, Solène Morvant-Roux, Isabelle Guérin, Davide Forcela

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Abstract

The Dominican Republic’s microfinance sector is considered to be a solid market where overindebtedness prevention best practices are widely, and successfully, implemented. Relying on qualitative data collection tools and analysis, we identify these ‘best practices’ as self-regulation mechanisms, and we show how they fail to fully fulfil their goals in the Dominican market. While financial exclusion supports the idea of a sizeable microcredit market, we argue that the focus on growth and high competition strongly jeopardize the positive social outcomes of microcredit, and that only a paradigm shift within the sector will change the present situation.
Original languageEnglish
Pages (from-to)919-935
JournalJournal of International Development
Volume29
Issue number7
Early online date7 Sep 2016
DOIs
Publication statusPublished - 1 Oct 2017

Keywords

  • Dominican Republic
  • financial practices
  • microfinance
  • over-indebtedness prevention
  • self-regulation

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