A Research Agenda for Financial Inclusion and Microfinance
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A Research Agenda for Financial Inclusion and Microfinance

Edited by Marek Hudon, Marc Labie and Ariane Szafarz

How can financial services, such as credit, deposit accounts, financial transfers, and insurance be provided to people in need? This challenging and complex issue has been a topic of interest for the international aid community for decades. Drawing on renowned experts in microfinance and financial inclusion, this Research Agenda sheds much-needed light on this multifaceted challenge and points the way ahead for future research.
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Chapter 10: Microfinance in the North: where do we stand?

Anastasia Cozarenco and Ariane Szafarz


Microfinance-like activities have existed in developed countries long before Mohammad Yunus coined the term “microcredit” in the 1970s. Several past financial institutions in Western Europe and North America parallel with contemporary microfinance institutions (MFIs). These institutions include the Monti di Pieta, founded in Italy in the 15th century to provide low-interest loans to the poor (Di Castri, 2010), the English lending charities dating back to the 15th century, the Irish loan funds active between 1720 and 1950 (Hollis & Sweetman, 2001), and the Italian Casse Rurali established since 1883 (Hollis & Sweetman, 1998). In the middle of the 19th century, a spectacular cooperative movement was initiated by the English Rochdale Society of Equitable Pioneers. At the same time in Germany, Hermann Schulze-Delitzsch and Friedrich Raiffeisen launched the concept of credit cooperatives (Guinnane, 2011; Perilleux & Nyssens, 2017), which later inspired the development of cooperatives and credit unions in Europe (Italy, Spain, France, and so on) and North America, and beyond. These institutions and their modern successors confirm that microfinance is a worldwide phenomenon, in line with Yunus’s (1999, p.175) statement: “Whenever I am asked if Grameen can work in other countries, I respond emphatically that it can work wherever there is poverty, including wealthy countries.” Despite their specific structures and operations, the historically distant institutions shared notable features with modern MFIs. First, they served the social purpose of filling the gap between pawnshops and traditional banks reluctant to serve the poor (Hollis & Sweetman, 1998). Second, they often required the presence of cosigners, so announcing the implementation of group lending (Guinnane, 2011). Last, like current MFIs, the pioneering institutions aimed at harnessing local information and took advantage of the social ties existing among their clients (Hollis & Sweetman, 2001).

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