Barriers to the development of microfinancing in Malta : a study

Abstract

Purpose: The objective of this study is to determine and understand the most significant barriers to microfinancing in Malta. Through the recognition of the principal barriers, this study is also intent on determining the possible solutions to overcome such barriers. Design: In meeting these objectives, primary data for this study was collected through in-depth semi-structured interviews with thirteen knowledgeable individuals in the microfinance movement. Findings: The study revealed that the most significant obstacles which are inhibiting microfinancing in Malta from developing and growing are, the lack of awareness regarding the microfinance movement in Malta; the challenges in constructing an applicable governance structure and business model within the microfinance institutions; and finally, the challenges of determining the methods to ensure financial sustainability within the institutions. Conclusions: This study concludes that in order to aid microfinancing in developing and growing in Malta, primarily, one must consider increasing the awareness on the subject. In addition, in order for the microfinance movement to realize its full potential, collaboration between banks and microfinance institutions should take place to aid in enhancing the operations of microfinancing. Value: This study sheds light on the different barriers which are inhibiting microfinance in Malta from prospering. Therefore, it is hoped that while this study will be used as a basis for further research on the microfinance movement in Malta, it is also hoped that targeted actions are taken in order to mitigate such barriers to help the microfinance movement in Malta to thrive.