G2TT
来源类型Discussion paper
规范类型论文
来源IDDP13698
DP13698 Micro-equity for Microenterprises
Suresh De Mel; David McKenzie; Christopher Woodruff
发表日期2019-04-27
出版年2019
语种英语
摘要Many microenterprises in developing countries have high returns to capital, but also face risky revenue streams. In principle, equity offers several advantages over debt when financing investments of this nature, but the use of equity in practice has been largely limited to investments in much larger firms. We develop a model contract to make self-liquidating, quasi-equity investments in microenterprises. Our contract has three key parameters that can be used to shift risk between the entrepreneur and the investor, resulting in a continuum of contracts ranging from a debt-like contract that shifts little risk from the entrepreneur to a pure revenue-sharing contract in which the investor absorbs much more of the risk. We discuss implementation choices, and then provide lessons from a proof-of-concept carried out by an investment partner, KGC Equity, which made nine investments averaging $3,800 in Sri Lankan microenterprises. This pilot demonstrates that our contract structure can work in practice, but also highlights the difficulties of micro-equity investments in an environment with weak contract enforcement.
主题Development Economics
关键词Micro-equity Microenterprises Microfinance Alternative financing Contract enforcement in transition
URLhttps://cepr.org/publications/dp13698
来源智库Centre for Economic Policy Research (United Kingdom)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/542560
推荐引用方式
GB/T 7714
Suresh De Mel,David McKenzie,Christopher Woodruff. DP13698 Micro-equity for Microenterprises. 2019.
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