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ID: 147612

Commercialization and mission drift: evidence from a large Chinese microfinance institution / Jia, Xiangping; Cull, Robert ; Guo, Pei ; Ma, Tao

Jia, Xiangping	Journal Article
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Summary/Abstract

Front-line loan officers of microfinance institutions (MFIs) are important in acquiring information on potential borrowers and selecting them in accordance with the MFI's mission. We use a unique data set on loan officers and their loan portfolios from China's largest NGO microfinance institution to test whether officers' personal characteristics affect the size and quality of their loans. We study a period in which the institution shifted from reliance on government donations and subsidies to commercial sources of funding. Imposing more commercial incentives on loan officers could affect how they balance potentially competing objectives to serve the poor and pursue profitability. We find that loan officers who were formerly farmers or worked in local government were better able to maintain lending to poorer borrowers, without incurring substantially lower repayment rates on their loans. In short, it appears that the career backgrounds of loan officers did play a role in preventing mission drift.

Key Words

Microfinance ; Commercialization ; Loan Officer ; Outreach

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ID: 128161

Marketing of farmer professional cooperatives in the wave of tr / Jia, Xiangping; Huang, Jikun; Zhigang Xu

Huang, Jikun	Journal Article
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2012.

Summary/Abstract

The upstream agrofood market in China is dominated by a vast number of small farmers and traders, which challenges food safety compliance. To promote small farmers' access to the commercialized agrofood market, membership in farmer professional economic cooperatives (FPCs) is considered to be an important strategy by the Chinese leaders. The goals of this study are to investigate the marketing of FPCs in China and to determine their record of food safety compliance. Based on 157 FPCs from a nearly national representative survey, this paper shows that marketing FPCs in China relies primarily on the wholesale market, but there is a notable penetration of the modern supply chain via FPCs. Government-driven agribusiness facilitates farmers' access to markets via FPCs. However, food safety standards are not well-specified in the current FPCs' marketing.

Key Words

China ; Cooperatives ; Food Safety ; Agribusiness ; Farmer

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