SCHOOL
OF BUSINESS & MANAGEMENT
ECON 453: Microfinance & Microenterprise Development
Spring
2008, Dr.
Wilden
219; (626) 815-3823; rconover@apu.edu
The mission of the
Summary:
Microfinance and microenterprise development are strategies for strengthening the economic opportunities of poorer households to enable families to build assets, provide income, manage the risks and vulnerability that they face, and plan for a better future. This course examines these approaches in depth, detailing the work of MED and MFI, and evaluating the effectiveness of various projects at accomplishing their stated goals.
Prerequisite:
ECON 250
Principles of Macroeconomics
ECON 251 Principles of Microeconomics
Office Hours: Drop by my office Monday 10:30 – 12 noon and Wednesday 1:30 –
3 PM, or make an appointment with me. E-mail also works for some questions.
Required Text and Materials:
The Economics of Microfinance by Beatriz
Armendáriz and Jonathan Morduch. (MIT Press, 2005).
Christian Microenterprise
Development by David Bussau and Russell Mask (Regnum,
2003).
Additional readings as assigned.
Course
Objectives: By the end of this course, students should be able to:
1. Clearly discuss the role of values in market activity
and articulate an understanding of a set of core Christian values that impact an
understanding of the issues addressed by microfinance and microenterprise
development.
2. Explain
the role of microfinance and microenterprise development in meeting the
needs of the poor.
3. Demonstrate their understanding of the fundamental
elements of the operations of microfinance lending organizations.
4. Discuss the impact of microfinance and
microenterprises on the communities in which they operate.
5. Evaluate the effectiveness of microcredit and
microenterprise programs based on a variety of criteria.
6. Design a basic microenterprise or microfinance
project and appraise its potential impact on the community in which it would be
based.
Revisions:
This syllabus may be revised during the semester by the
professor as needed, including dates for exams. Any revisions to the syllabus
will be announced in class.
General
Grade Expectations:
Your grade will depend upon your performance on the homework
and exams. No extra credit is available except as may be occasionally announced
in class. Students who are concerned about their grades should see me as early
as possible during the semester to work out possible strategies for improving
your performance. Grades will not be changed after the course is over except in
the case of clerical error. Grade appeals procedures are in the Student
Handbook.
In general, the following guidelines will apply to this
course. Your specific grade will be determined by the point total that you accumulate
throughout the course.
Grade A: Outstanding
knowledge regarding details, assumptions and implications of the course content;
demonstrates superior thinking with information relevant to application,
critique, relationship to other information.
B: More than adequate knowledge
regarding technical terms, distinctions, ability to begin using information;
demonstrates ability to think clearly about the information and its
relationship to other information.
C: Basic knowledge needed to
function and carry on learning regarding major principles, central terms, major
figures; awareness of the field.
D: Serious gaps in knowledge,
confusion of concepts and categories, inability to recall basic information.
F: Absence of knowledge, incapable
of carrying on a conversation about the subject, misunderstands most concepts,
confuses all categories.
Specific
Grading Policy: There are 400 points possible in the course:
Homework 100 (90% scale)
Midterm Exam 100 (TBA scale)
Project proposal (group) 100 (90% scale)
Final Exam 100 (TBA
scale)
400
The exams will be one class period each. They will
consist of a combination of objective, short answer and discussion questions
and calculation problems. No notes or study aids (including the papers of other
students) may be used. Calculators? OK.
MFI or MED project proposal: You and your group
will carry out background research on a community to be impacted; design a
project which addresses the internally and externally perceived needs of the
community; develop a project budget with identification of initial and ongoing
sources of funding; evaluate of the sustainability of the project; develop a
plan for evaluating the effectiveness of the program and for implementing a
process of continual improvement.
The final will be comprehensive.
There will be no make-up exams. With PRIOR approval the points on one missed
exam will be added to the value of the final and the results scaled
appropriately. There is no provision for missing more than one exam, and you
MUST take the final.
Participation:
Students are expected to come to each class
fully prepared. This includes a full and complete reading of the material
assigned for the day. The professor will pose questions each class period for
discussion, and will evaluate each student’s participation in the discussion on
the basis of how well the answers given reflect knowledge of the reading material and how well the student is able
to critically evaluate and apply that material. Additionally, specific questions
may be assigned from time to time that will be discussed in class. By
definition, failure to attend class means that the student is not participating
for the class.
Academic
Honesty:
Students in this and
all courses at
“As a student
at this
The mission of
I strongly recommend discussion / study groups. However,
you may not give or receive any assistance on exams except from the course
professor. This includes exams from former students of the course. Any work
throughout the course that appears to have been copied from another source
without appropriate citation of that source violates the standard of academic
integrity. If material appears to be copied, or other cheating occurs, all
students involved will receive zero points for that assignment. Second
violations will result in all students involved being assigned a grade of “F”
for the course.
Signing a role sheet for another student is considered
forgery and will result in being assigned a grade of “F” for the course. Any
other acts of academic dishonesty will be dealt with in a similar manner. In
any case of a suspected violation of the standards of academic integrity, the
incident will be reported to the Vice Provost’s office and further steps may be
taken in accordance with the Academic Integrity Policy of the University.
Attendance
Policy:
Students are expected to attend every class, and
attendance will be taken. Points will be deducted from a student’s final score
for absences (excused or unexcused) according to the following schedule:
0 to 2
= 0; 3 or more = 20 points each.
Students who arrive after class has begun or depart
before class is over will be counted as absent. Students who are late or absent
because of approved university events or other valid reasons must inform the
instructor by e-mail prior to
such events. Students are still responsible for assignments due and material
presented on such days.
Exceptions:
With the instructor’s
approval of a valid, documented excuse, (e.g. sickness with signed medical
excuse, etc.) alternative arrangements can be made. However, the range of
acceptable excuses is very limited. In particular, computer hardware or
software failures and flight departure times are not valid excuses. Back
up your work regularly, and do not schedule your flight out of town for a date
before the final exam period. Students who will be absent because of an
approved university event must inform the instructor prior to such an
event. Students are expected to contact the course professor as soon as
possible to obtain approval and schedule make-ups.
Any student in this course who has a disability that might
prevent you from fully demonstrating your abilities should meet with an advisor
in the
SCHEDULE OF CLASS MEETINGS
ECON
453: Microenterprise and Microfinance Development
DATE TOPIC HAVE READ NOTES
1/8 Introduction to MED and MFI A & M 1
15 Banks, banking and the poor 2
22 Microfinance around the world 3
29 Principles of microlending: groups & beyond 4, 5
2/5 Savings, Insurance 6
12 Gender issues; Impact measurement 7, 8
19 Impact Analysis ---
26 Subsidy and sustainability of MFI institutions 9
3/4 Managing Microfinance 10
11 Midterm Exam Chapters 1-10
Microenterprise development Assigned
readings
March 15 – 24: EASTER VACATION!
25 Projects, Programs and MED Organizations;
Microenterprise in the community B & M 1 – 3
4/1 Strategy and Sustainability in MED 4 – 7
8 Project design and implementation Assigned readings
15 Project evaluation and improvement Assigned
readings
22 Presentation of project plans
FINAL EXAM: CHECK THE FINALS
SCHEDULE FOR THE OFFICIAL TIME OF THE EXAM.
Aguilar, V. (1999). Is Micro-Finance
reaching the Poor? An Overview of Poverty
Targeting Methods. Appui au Développement
Autonome. Retrieved November 2, 2007 from http://www.globenet.org/horizon-local/ada/c18.html
Armendariz
de Aghion, B. & Morduch, J. (2000). Microfinance Beyond Group lending.
Economics of Transition, Vol. 8. Retrieved
November 13, 2004 from http://www.microfinancegateway.org/files/18230_Microfinance_Beyond_Group_Lending.pdf
Bhatt, Nitin
& Shui-Yan Tang (2001). Delivering
Microfinance in Developing Countries: Controversies and Policy Perspectives
Bhatt, Nitin
& Shui-Yan Tang (1998). Group-based Microfinance and Economic Development,
in Liou, K. T. ed., Handbook of Economic Development.
(NY, Marcel Dekker), pp. 115-138.
Brau, J & Woller, G. (2003). Microfinance: A
Comprehensive Review of the Existing
Literature and an
Outline for Future Financial Research. Journal
of Entrepreneurial Finance and Business Ventures. Retrieved November 27, 2004
from http://marriottschool.byu.edu/emp/brau/JEFBV%20Microfinance%20Review%20-%20Brau%20and%20Woller.pdf
Brau, James &Gary Woller (2003). Microfinance: A Comprehensive
Review of the Existing Literature and an Outline for Future Financial Research.
Christen, Robert Peck et. al. (1995). Maximizing the Outreach of
Microenterprise Finance. The Emerging Lessons of Successful Programs.
Christen, Robert Peck & Richard Rosenberg (2004). Financial
Institutions With a “Double Bottom Line”: Implications For the Future of
Microfinance.
Chua, Ronald T (1998). The Performance and Sustainability of Two Philippine Microfinance
Institutions
Farrington, Todd (2003). Trends
in Microfinance Capital Structure
Foote,
E. (1997). The History of the Grameen Bank. CELCEE Digest, Number 97-6.
Retrieved November 25, 2004 from http://www.celcee.edu/publications/digest/Dig97-6.html
Haley, Barbara & Jonathan Morduch (2002). Analysis of the Effects of Microfinance on Poverty Reduction
Helms, Brigit & Paul Mosely (1996). Financial Sustainability,
Targeting the Poorest, and Income Impact: Are There Trade-offs for
Microfinance Institutions?
Helms,
B. & Reille, X. (2004). Interest Rate Ceilings and Microfinance: The Story
So
Far. Occasional Papers, No. 9. Retrieved
November 13, 2004 from http://www.cgap.org/docs/OccasionalPaper_9.pdf
Herr,
P. et al. (2003). Microenterprise Development: USAID’s Program Has Met Some
Goals; Annual Reporting Has Limitations. United
States General Accounting Office 04-171. Retrieved on November 28, 2004 from http://www.gao.gov/new.items/d04171.pdf
Hickson, Robert (1999). Reaching Extreme
Poverty: Financial Services for the Very Poor
Kaboski, Joseph P. & Robert M. Townsend (2002). Policies and Impact: An Analysis of
Village-Level Microfinance Institutions
Mask,
Russell P. (2000). Christian
Microenterprise Development: Counting the Cost and Building the Kingdom
Retrieved on January 24, 2007 from http://www.aerdo.org/resources/organizations/christian_microcredit.html
Miller, Calvin (c. 2003). Comments
on “Models of Rural Financial Institutions” by Manfred Zeller.
Morduch,
J. (2000). The Microfinance Schism. World Development Vol. 28, No. 4.
Retrieved on November 28, 2004 from http://www.nhh.no/geo/302/reading/microWD2000.pdf
Painter, G. and Tang S. (c. 2000). The Microcredit Challenge: A Survey
of Programs in
http://www-rcf.usc.edu/~gpainter/california_microcredit.pdf
Paxton, Julia Anne (1996). Determinants
of Successful Group Loan Repayment: An Application to
Peck, R., Rosenberg, R.,
& Veena Javadeva. (2004). Financial
Institutions with a
“Double
Bottom Line”: Implications for the Future of Microfinance. Occasional Paper,
No. 8. Retrieved November 13, 2004 from http://www.cgap.org/docs/OccasionalPaper_8.pdf
Prescott, E. (1997). Group Lending and Financial Intermediation: An
Example. Federal
Reserve Bank of
Robinson, Marguerite (2001). The
Microfinance Revolution: Sustainable Finance for the Poor
Rock, Rachel et al. (1998).
Principles and Practices of Microfinance Governance
Rosenberg, Richard (2002). Microcredit Interest Rates
Schreiner, Mark (2002). Aspects of Outreach: A Framework for the Discussion of the Social
Benefits of Microfinance
Schreiner, Mark (1999). Self-Employment,
Microenterprise, and the Poorest
Sharma, M. (Ed.). (2000). Microfinance: A Pathway
from Poverty. International Food
Policy Research
Institute. Retrieved November 25, 2004 from http://www.ifpri.org/themes/mp05/brief/mp05_brief.pdf.
Simanowitz, Anton et al. (2000) Overcoming
the Obstacles of Identifying the Poorest Families
Simanowitz,Anton (2001). Microfinance for the Poorest: A review of
issues and ideas for contribution of Imp-Act.
Woodworth, Warner P (2000). Third
World Economic Empowerment in the New Millennium: Microenterprise,
Microentrepreneurship, Microfinance
Woller, Gary M. & Warner Woodworth (2001). Microcredit and
Zeller, Manfered (1998). Determinants
of Repayment Performance in Credit Groups: The Role of Program Design,
Intragroup Risk Pooling, and Social Cohesion
Zeller, Manfred (2003?). Models
of Rural Financial Institutions
Recommended Online Search Engines and Databases
Google
Scholar: http://scholar.google.com
Asian
Development Bank publications archive: http://www.adb.org/Publications/default.asp
Consultative
Group to Assist the Poor publications: http://www.cgap.org/publications.html
The
Enterprise Development Website microfinance links: http://www.enterweb.org/microcre.htm
EconPapers
archive: http://econpapers.hhs.se
Intermediate
Technology Development Group article library:
http://www.alternative-finance.org.uk/cgi-bin/search.pl?language=E
Journal
of Microfinance archive: http://marriottschool.byu.edu/microfinance/archives.cfm
Microfinance
Gateway: http://www.microfinancegateway.org
USAID
Knowledge sharing website for MED: http://www.microlinks.org/ev_en.php