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Sustainable development? Exploring the social impact of mesocredit in emerging conomies using qualitative and quantitative performance indicators

Mentink, BSC. P.F. s (2015) Sustainable development? Exploring the social impact of mesocredit in emerging conomies using qualitative and quantitative performance indicators.

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Abstract:Lendahand provides loans to small and medium sized enterprises (SMEs) in emerging economies. By doing so they help them to expand, which in turn generates jobs in their operating region. These loans are called mesocredits and this thesis started with Lendahand's wish to gain more insights into the social impact of their mesofinance loans. In this research we will look at the social performance of Lendahand's portfolio in the Philippines and Colombia in 2014. The main question to be answered is What social performance does Lendahand's mesocredit portfolio have when measured on key performance indicators? This thesis works with the model of the Impact Chain as a generic way to describe social performance. In Colombia 2,06 and on the Philippines 3,92 jobs were created for every €10.000 lent. Both are more than the number of jobs generated on average in the microfinance sector to which we compare Lendahand's portfolio (1.19 for Colombia and 1.13 for the Philippines). We concluded that there are some economies of scale present in the social performance generated. The first is that companies, once they reach a certain size, will be able to access better ways of financing themselves. The second is that repeat-loans have different characteristics, but for various reasons they usually outperform first time loans. We also checked the assumptions underlying Lendahand's Impact Chain, the first being that providing better financial products will help entrepreneurs to expand their business. Although this relationship is hypothesised in literature we could not prove it using the data available, so more research on this might provide more insights. The second assumption is that turnover growth will lead to job generation. This assumed relationship is found in literature and we also found a significant positive association between growth in company turnover and number of employees.
Item Type:Essay (Master)
Clients:
Lendahand
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:30 exact sciences in general, 50 technical science in general, 83 economics, 85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/68363
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