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Turning around state-owned banks in underserved markets
Robert Dressen | Jay Dyer | Zan Northrip
Many state-owned retail banks in developing countries do not operate profitably and are reliant on repeated financial bail-outs from their governments and from donors. Given this situation, donors are oftenmore inclined to invest in new MFIs than to attempt to revive problematic old ones. However, this article describes how external teams may be brought in to manage the restructuring of state-owned retail
banks with some success. Two cases are described, Microfinance Bank of Tanzania and the Agricultural Bank of Mongolia. In both cases the banks' wide branch network was seen as a useful asset through which
profitable new products and services could be sold to rural clients. The article describes the restructuring in each case, outlines the pre-conditions for successful restructuring of this kind (including
a commitment on the part of the government to privatization of the bank), and discusses the lessons learned.
Many state-owned retail banks in developing countries do not operate profitably and are reliant on repeated financial bail-outs from their governments and from donors. Given this situation, donors are often
more inclined to invest in new MFIs than to attempt to revive problematic old ones. However, this article describes how external teams may be brought in to manage the restructuring of state-owned retail
banks with some success. Two cases are described, Microfinance Bank of Tanzania and the Agricultural Bank of Mongolia. In both cases the banks' wide branch network was seen as a useful asset through which
profitable new products and services could be sold to rural clients. The article describes the restructuring in each case, outlines the pre-conditions for successful restructuring of this kind (including
a commitment on the part of the government to privatization of the bank), and discusses the lessons learned.
more inclined to invest in new MFIs than to attempt to revive problematic old ones. However, this article describes how external teams may be brought in to manage the restructuring of state-owned retail
banks with some success. Two cases are described, Microfinance Bank of Tanzania and the Agricultural Bank of Mongolia. In both cases the banks' wide branch network was seen as a useful asset through which
profitable new products and services could be sold to rural clients. The article describes the restructuring in each case, outlines the pre-conditions for successful restructuring of this kind (including
a commitment on the part of the government to privatization of the bank), and discusses the lessons learned.
The political economy of financial inclusion: tailoring donor policy to fit
Johnson, Susan
Williams, Richard
Development Policy Review, Vol. 34 (2016), Iss. 5 P.721
https://doi.org/10.1111/dpr.12170 [Citations: 17]Tabs navigation
- Value chain financing: evidence from Zambia on smallholder access to finance for mechanization
- Developing agro-pastoral entrepreneurship: bundling blended finance and technology
- Building frontline market facilitators' capacity: the case of the ‘Integrating Very Poor Producers into Value Chains Field Guide’
- Boosting financial inclusion through social assistance reform: evidence-based approach in selecting a payment system
- Impact of COVID-19 on livestock exports from Somalia and the Horn of Africa
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