Interview with Tristan Caballero-Montes, author of an ADA-supported PhD thesis on the regulation of the microfinance sector

29 April 2022 News
Tristan Caballero-Montes defending his thesis in January 2022.

ADA has a partnership with the Centre for European Research in Microfinance  (CERMi), hosted by the University of Mons in Belgium, one of the largest microfinance research centres in Europe. In the framework of this partnership, ADA supported Tristan Caballero-Montes' PhD thesis on ‘Microfinance Industry Dynamics: Analyses of Regulation, Competition, and Collective Action’. In early 2022, Tristan defended his thesis in the presence of ADA's management. We asked him to share his experience regarding his thesis topic and his collaboration with ADA and CERMi.  

In this interview, Tristan explains how "the support of ADA added a fundamental value in terms of credibility" and allowed him "to link up key contacts to carry out different missions. The collaboration provided continuous feedback, technical support, and exchanges on approaches and results" related to his research. 

ADA: Since 2018, you have been working on your thesis. ADA supported it as part of its partnership with CERMi to develop research for the benefit of practitioners. Can you tell us how the collaboration with ADA went? What was its contribution to your thesis over the years?   

Tristan Caballero-Montes: ADA supported me on many levels. First of all, having a partner such as ADA supporting my thesis was an essential added value in terms of credibility for the academic partners evaluating my proposals, but also for the field partners likely to host me in the framework of my research. Concerning the latter, ADA established key contacts to carry out various missions. Secondly, the collaboration provided continuous feedback, technical support, and exchanges on the approaches and results of my research. On many occasions, such as seminars, meetings, conferences, or simple contacts with ADA, I was able to get essential feedback on my work from experts. These occasions also enabled me to disseminate my research and results, and thus promote my work. Finally, ADA has financially supported my research projects, notably through the financing of field missions, conferences and training courses.

ADA: The thesis bears the title ‘Microfinance Industry Dynamics: Analyses of Regulation, Competition, and Collective Action’. Who is it aimed at and how can the results help microfinance and regulatory practitioners in the field? Can you share the most important takeaways and the expected impact of your work?   

Tristan Caballero-Montes: My thesis is aimed at practitioners, experts and academics seeking to better understand the sectoral dynamics influencing microfinance and financial inclusion, in particular regulation, competition, and the role of professional associations. I conducted four research projects. The first one analyses the strengthening of the regulatory framework for microfinance in Benin implemented between 2012 and 2014. My analysis suggests that this regulatory strengthening  has not fully fulfilled its aim of supporting sustainability, social performance and market diversification. The second and third studies analyse interest rate caps as a regulatory tool. In particular, the second study identifies the negative effect of such a measure on financial inclusion and shows that this is exacerbated by competition. The third study details the mechanisms explaining such an effect through a field mission carried out within the Cambodian microfinance association. Finally, via the Tanzanian case study, the fourth research describes organisational obstacles to the functioning of professional associations, such as the heterogeneity of members, the difficulty of balancing the benefits and costs of participation for each member and the association-regulator relationship. Overall, my thesis provides an original view of different aspects of the regulation of the sector, as well as concrete frameworks for reflection and decision making that can be used by actors in inclusive finance, be they regulatory agencies, organisations supporting the sector, or research centres. 

"Having a partner such as ADA supporting my thesis was an essential added value for the academic partners evaluating my proposals, but also for the field partners who could host me in the framework of my research." Tristan Caballero-Montes

ADA: To write your thesis, you visited ADA's partner microfinance associations in the field in Cambodia and Tanzania. What surprised you most about your fieldwork?     

Tristan Caballero-Montes: Looking back, it is interesting to see how the research questions do not always arise when you most expect them and evolve considerably along the way. One example is the way in which my first and last studies - chronologically speaking - were closely linked. It was during my first fieldwork in Cambodia that I unknowingly identified the research question for the very last study I was to conduct. In 2018, based at the Cambodia Microfinance Association (CMA) to study interest rate caps, I had the opportunity to learn about the workings of a professional microfinance association, even though this had no implications for the key topic of the study. Months later, while reflecting on the follow-up to my thesis, the initiatives carried out by CMA in terms of self-regulation enabled me to consider the standards defined by professional associations. This questioning led me to explore the organisational functioning of such actors, this time within the Tanzanian association. So, starting from the question of self-regulation in Cambodia... I ended up analysing the functioning of a professional association in Tanzania! 

ADA: After the completion of this great work, what are you going to do next?  

Tristan Caballero-Montes: I have been accepted at the Harvard Kennedy School to continue my research for a few months. This will allow me to take on new projects, while thinking about what to do next. The role of financial inclusion and microfinance institutions in the fight against the effects of climate change, or the development of new approaches to analyse the performance of microfinance institutions, are subjects that particularly interest me.