Microfinance and Dynamic Incentives
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On June 13, ISET hosted Dr. Dmitry Shapiro from the University of North Carolina at Charlotte, who presented his paper “Microfinance and Dynamic Incentives”.
The presenter started his presentation by providing some numbers related to microfinance organizations, explaining the essence of how they work and providing examples of problems that these organizations face, such as: adverse selection, moral hazard, the lack of collateralizable assets, the lack of enforcement and high costs. In the presence of such problems, repayment rates were very low and heavy subsidization was needed. One solution to this is the use of dynamic incentives, which is the methodology used by microfinance organizations throughout the world. According to this methodology, borrowers have incentives to repay in order to have access to higher future loans. This successful methodology is one that does not create incentives to default.
ISET Organized an Excursion to the “GIFT OF FOREST” Agricultural Cooperative
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On May 31, ISET organized an excursion to an agricultural cooperative called “Gift of Forest” in Tsinamdzgvriantkari, in the Mtskheta-Mtianeti region of Georgia. The purpose of the excursion was to learn more about a successful cooperative and understand how this success could be replicated in other contexts and value chains in Georgia. Students from ISET, representatives of non-government, international and other local organizations joined the excursion.
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