McLaughlin, Eoin Joseph
Microfinance institutions in nineteenth century Ireland.
PhD thesis, National University of Ireland Maynooth.
This thesis is a comprehensive study which examines the economic, social and
political ideology underpinnings of microfinance institutions in Ireland. It also
analyses the sources, uses, and consequences of microfinance for the borrower
individually and the Irish economy as a whole. The thesis studies the developments of
a number of microfinance institutions that operated in nineteenth century Ireland: loan
funds, savings banks (TSB and POSB), joint stock banks, Monts-de-Piété, Raiffeisen
banks, state-funded land purchase, and emigrant remittances. It utilises financial and
microfinancial history as a prism to analyse Irish economic and social history.
The thesis concludes by outlining four reoccurring themes that are present
throughout: legislative constraints, institutional imitation, economic versus social
goals and state intervention. It argues that all the institutions studied experienced
legislative constraints, but that only the joint stock banks were able to overcome such
constraints. Furthermore, it argues that the legislation encouraged moral hazard which
resulted in fraud as it absolved the management of loan funds and savings banks from
any liability for the running of those institutions. The thesis argues that the joint stock
banks were the only successful institutional imitation as the propagators of these
institutions took the existing market into consideration, something not done by others
such as the Mont-de-Piété and Raiffeisen Banks. It argues that many of the
institutions were promoted on the basis of social rather than economic motivation, and
as a result the promoters did not assess economic conditions in the market. Finally,
the thesis argues that government intervention in the economy distorted financial
markets, through involvement in savings markets and as a long term lender. It argues
that the long term lending activities of the state encouraged inefficient investment and
hindered long term Irish economic development.
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