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Effects of Macroeconomic Factors in the Performance of Micro Finance Institutions in Ecuador

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  • Eric Joel Caro

    (Escuela Superior Polit cnica del Litoral, ESPOL, Facultad de Ingenier a Mec nica y Ciencias de la Producci n, Campus Gustavo Galindo Km 30.5 V a Perimetral, P.O. Box 09-01-5863, Guayaquil, Ecuador)

Abstract

Microfinance institutions give credit to people who do not have facilities of access to the financial system with the aim of using it to create or expand a business. However, these institutions may be affected, exogenously, by the situation of the country where they operate, influencing the full development of their activities, such as granting benefits to their applicants. The author analyzes the effect that macroeconomic factors may have on the performance of microfinance institutions. Ecuador is taken as the reference country, using the Savings and Credit Cooperatives Organizations (SACCO), Non-Governmental organizations and Banks, which are part of this microfinance sector. A fixed effect panel data regression was used, with a multiple imputation treatment for missing values because of the quality of the information obtained. It was found that there is no statistically significant influence on the macroeconomic variables used in the study on the performance of microfinance in Ecuador.

Suggested Citation

  • Eric Joel Caro, 2017. "Effects of Macroeconomic Factors in the Performance of Micro Finance Institutions in Ecuador," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 547-551.
    • Handle: RePEc:eco:journ1:2017-05-63
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    References listed on IDEAS

    as
    1. Ahlin, Christian & Lin, Jocelyn & Maio, Michael, 2011. "Where does microfinance flourish? Microfinance institution performance in macroeconomic context," Journal of Development Economics, Elsevier, vol. 95(2), pages 105-120, July.
    2. Annabel Vanroose, 2008. "Which macro factors make microfinance institutions reach out?," ULB Institutional Repository 2013/174948, ULB -- Universite Libre de Bruxelles.
    3. Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," The World Bank Economic Review, World Bank, vol. 19(2), pages 263-286.
    4. Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim & Aditi Gupta, 2011. "Performance of Microfinance Institutions-A Macroeconomic and Institutional Perspective," Discussion Paper Series DP2011-22, Research Institute for Economics & Business Administration, Kobe University.
    5. Annabel Vanroose, 2008. "What macro factors make microfinance institutions reach out?," Working Papers CEB 08-036.RS, ULB -- Universite Libre de Bruxelles.
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    Cited by:

    1. Fiaz Ahmad Sulehri & Amjad Ali, 2024. "Nexus among Regulatory Framework, Economic Growth and Sustainable Development: Insights from Structural Equation Modeling Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 110-117.
    2. Sulehri, Fiaz Ahmad & Ali, Amjad, 2024. "Country Risk and Sustainable Development: Mediating Role of Economic Growth," MPRA Paper 121290, University Library of Munich, Germany.

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    More about this item

    Keywords

    micro finance; Ecuador; finance; bank.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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