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Microlending in emerging economies: Building a new line of inquiry from the ground up

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Abstract

The world's poor may be the last great frontier in international business. International microlenders are increasingly tapping into this emerging opportunity by extending small business loans to millions of borrowers. However, to date, there is very limited understanding of this domain from an international business perspective. Using qualitative case studies developed in Guatemala and the Dominican Republic we probe the causes and consequences of high performance and business failure for microloan recipients. The analysis of these cases led to the development of six testable propositions focused on the behavior of borrowers whose loans populate the portfolios of international microlenders. Our research aims to lay a foundation in international business for future research on microlending.

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Notes

  1. It is not uncommon in the indigenous communities we studied for men to have a first official family and then a second unofficial family. The children in the second family have few rights. Support goes to the first family.

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Acknowledgements

We thank Grameen Bank and Esperanza for research site access. We thank Rosalie Tung, editor of the qualitative special issue, and three anonymous reviewers for their guidance in developing our paper. In addition, we thank David Ahlstrom, Curt Moore, Abdul Rasheed, and Justin Webb for their comments on earlier drafts of the paper. We thank the Neeley Summer Research Program and the Neeley Entrepreneurship Center for support of the first author, the College of Business at the University of Texas at Arlington for support of the second author, and the School of Business, Universidad Francisco Marroquin, Guatemala, for support of the third author, and for the support of the project.

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Authors and Affiliations

  1. Department of Management, M.J. Neeley School of Business, Texas Christian University, Fort Worth, USA

    Garry D Bruton

  2. Department of Business, Sun Yat–sen Business School (SYSBS), Administration, Sun Yat–sen Business School (SYSBS), Sun Yat-sen University, Guangzhou, China

    Garry D Bruton

  3. Department of Management, University of Texas Arlington, Arlington, USA

    Susanna Khavul

  4. School of Business, Universidad Francisco Marroquín, Guatemala City, Guatemala

    Helmuth Chavez

Authors
  1. Garry D Bruton
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  2. Susanna Khavul
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  3. Helmuth Chavez
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Correspondence to Susanna Khavul.

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Accepted by Rosalie Tung, Area Editor, 30 June 2010. This paper has been with the authors for two revisions.

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Bruton, G., Khavul, S. & Chavez, H. Microlending in emerging economies: Building a new line of inquiry from the ground up. J Int Bus Stud 42, 718–739 (2011). https://doi.org/10.1057/jibs.2010.58

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