Microfinance and Social Investment
This paper puts a corporate finance lens on microfinance. Microfinance aims to democratize global financial markets through new contracts, organizations, and technology. We explain the roles that government agencies and socially-minded investors play in supporting the entry and expansion of private intermediaries in the sector, and we disentangle debates about competing social and commercial firm goals. We frame the analysis with theory that explains why microfinance institutions serving lower-income communities charge high interest rates, face high costs, monitor customers relatively intensively, and have limited ability to lever assets. The analysis blurs traditional dividing lines between non-profits and for-profits and places focus on the relationship between target market, ownership rights and access to external capital.
Capstone: In the Field
Commercial Fleet Programs (2011)
Faculty: Charles Brecher, Maria Doulis
Team: Carmen Montes de Oca, Christina Drake, Minghui Fu, ChiSan Lo, Junjie Tang
The New York City Department of Finance (DOF) is the primary revenue collection agency for City government. DOF currently offers four programs designed to facilitate summons closure for owners of commercial fleets. The programs range from simple notification programs to substantial discounts in return for the commercial entity waiving its rights to contest a summons. The DOF engaged the Capstone team to conduct a comprehensive evaluation of its programs and determine whether they are still appropriate solutions to the presentday challenges and needs of commercial ticketing in NYC. The team conducted interviews with different stakeholders, researched best practices in other municipalities, and conducted quantitative data analysis to produce a report for the DOF. The report contains feasible policy and procedural recommendations that will help DOF improve and reenvision these programs with respect to the agency's policy objectives.