Microcredit: What can we learn from the past?

Six microcredit organizations of 19th-century Europe are compared to identify what institutional designs were conducive to success and sustainability. Organizations that depended on charitable funding were more fragile and tended to lose their focus more quickly than those that obtained funds from depositors. An ability to adjust interest rates also appears important in sustainability. Examining historical microcredit is particularly useful since it offers an opportunity to explore the characteristics of organizations which were sustained over many decades, a perspective which is rare in modern microcredit banks and programs, most of which are less than 15 years old. (C) 1998 Elsevier Science Ltd. All rights reserved.