Microcredit and traditional and informal credits as sources of financing: ease of access and costs of working capital

Abstract

In order to achieve the economic inclusion of people, having access to working capital is a critical factor in developing countries. One of the first steps to accomplish this is through financial inclusion-- condition which the vast majority of people lack, trapped in a spiral of poverty. The mechanisms established for solving this situation include financing with traditional credits, informal credits, and microcredits. This study found that the three financing methods are costly, especially the last one. However, microcredit— which is a product intended to solve the problem, does not really do it, least when it comes to people with such a clear need to find a solution to their financial situation and who intend to be part of the existing financial system.

Entorno, december 2014, issue 57: 56-69