Insufficiencies and loopholes of self- regulation in overindebtedness prevention: the case of the Dominican Republic

Joana Da Silva Afonso, S. Morvant-Roux, D. Forcella, I. Guérin

Research output: Working paper

Abstract

The Dominican Republic’s microfinance sector is considered to be a growing and
solid market. However, the widely implemented overindebtedness prevention
best practices are by themselves not sufficient to prevent financial fragility
among a part of the MFIs’ clients.

We identify these practices as self-regulation mechanisms and, based on
fieldwork conducted between 2012 and 2015, we show how they fail to fully fulfil
their goals in the Dominican market. While financial exclusion supports the idea
of an unlimited microcredit market, we argue that the focus on growth
imperatives and high competition strongly jeopardize the positive outcomes of
microcredit on clients’ well-being.
Original languageEnglish
PublisherUniversité Libre de Bruxelles
Publication statusPublished - 8 Feb 2016

Publication series

NameCEB Working Paper

Keywords

  • microfinance
  • overindebtedness prevention
  • financial practices
  • self- regulation
  • Dominican Republic

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