| Abstract: |
This paper examines public-private partnerships in micro-finance, whereby NGOs
can help in channelizing credit to the poor, both in borrower selection, as
well as in project implementation. We argue that a distortion may arise out of
the fact that the private partner, i.e. the NGO, is a motivated agent. We find
that whenever the project is neither too productive, nor too unproductive,
reducing such distortion requires unbundling borrower selection and project
implementation, with the NGO being involved in borrower selection only. |