How to Design Online Models for Micro-lending in Developing Countries? Making Sense to MYC4 in Africa

This article explores a micro-lending platform linking investors mostly located in developed countries and micro-entrepreneurs located in Africa. At the heart of this social and economic innovation is the online auction model, a concept that has been intensively investigated and used in developed countries. However, little knowledge exists about how these new models are used and implemented in developing countries, and about how existing theories are able to explain such an emerging innovative phenomenon. The article makes two main contributions. First, it applies a theoretical pluralist approach to further improve our understanding of MYC4, an online auction model for micro-lending purposes being applied in Africa and selected as our case study. Secondly, it uses the understanding produced from data analysis of MYC4 to validate propositions derived from three theoretical approaches. Our analysis shows that the three theoretical approaches differ in their basic assumptions – critical dimensions – and in the usefulness of their propositions, two of them being more valuable than the third one for drawing up guidelines for designing and implementing online auction markets and for identifying implications regarding the role of information, technology and the stakeholders involved.