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Competition Between Microfinance NGOs: Evidence from Kiva

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  • Ly, Pierre
  • Mason, Geri

Abstract

This paper investigates empirically the effect of competition between microfinance NGOs seeking subsidized capital from individual social investors. Although NGO behavior in competitive environments is often subject to controversy, there is little formal empirical evidence to illustrate theoretical findings and inform policy. Using data from Kiva, an online peer-to-peer (P2P) microfinance platform, we find that competition has a sizable negative impact on projects’ funding speed and that the effect is stronger between close substitutes. This is important because competition for subsidized capital implies organizational pressures similar to those faced when NGOs compete for donations.

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  • Ly, Pierre & Mason, Geri, 2012. "Competition Between Microfinance NGOs: Evidence from Kiva," World Development, Elsevier, vol. 40(3), pages 643-655.
    • Handle: RePEc:eee:wdevel:v:40:y:2012:i:3:p:643-655
    DOI: 10.1016/j.worlddev.2011.09.009
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    Cited by:

    1. Kopel, Michael & Marini, Marco A., 2022. "Mandatory disclosure of managerial contracts in NGOs," Journal of Economic Behavior & Organization, Elsevier, vol. 199(C), pages 65-85.
    2. Armstrong, Kelly & Ahsan, Mujtaba & Sundaramurthy, Chamu, 2018. "Microfinance ecosystem: How connectors, interactors, and institutionalizers co-create value," Business Horizons, Elsevier, vol. 61(1), pages 147-155.
    3. Jonas Gamso & Jikuo Lu & Farhod Yuldashev, 2021. "Does foreign aid volatility increase international migration?," The Review of International Organizations, Springer, vol. 16(3), pages 581-598, July.
    4. Jordana VIOTTO, 2015. "Competition and Regulation of Crowdfunding Platforms: A Two-sided Market Approach," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(99), pages 33-50, 3rd quart.
    5. Gregor Dorfleitner & Eva‐Maria Oswald, 2016. "Repayment behavior in peer‐to‐peer microfinancing: Empirical evidence from Kiva," Review of Financial Economics, John Wiley & Sons, vol. 30(1), pages 45-59, September.
    6. Gani ALDASHEV & Cecilia NAVARRA, 2018. "Development Ngos: Basic Facts," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 125-155, March.
    7. Liu, Aiping & Urquía-Grande, Elena & López-Sánchez, Pilar & Rodríguez-López, Ángel, 2023. "Research into microfinance and ICTs: A bibliometric analysis," Evaluation and Program Planning, Elsevier, vol. 97(C).
    8. Michael Kopel & Marco A. Marini, 2020. "Mandatory Disclosure of Managerial Contracts in Nonprofit Organizations," Working Papers 2020.26, Fondazione Eni Enrico Mattei.
    9. Dorfleitner, Gregor & Oswald, Eva-Maria, 2016. "Repayment behavior in peer-to-peer microfinancing: Empirical evidence from Kiva," Review of Financial Economics, Elsevier, vol. 30(C), pages 45-59.
    10. Zhiyuan Gao & Zhiling Guo & Qian Tang, 2022. "How do monetary incentives influence giving? An empirical investigation of matching subsidies on kiva," Information Systems and e-Business Management, Springer, vol. 20(2), pages 303-324, June.
    11. Maria Figueroa-Armijos & John P. Berns, 2022. "Vulnerable Populations and Individual Social Responsibility in Prosocial Crowdfunding: Does the Framing Matter for Female and Rural Entrepreneurs?," Journal of Business Ethics, Springer, vol. 177(2), pages 377-394, May.
    12. Sofia Bapna & Martin Ganco, 2021. "Gender Gaps in Equity Crowdfunding: Evidence from a Randomized Field Experiment," Management Science, INFORMS, vol. 67(5), pages 2679-2710, May.
    13. Gregor Dorfleitner & Eva-Maria Oswald & Rongxin Zhang, 2021. "From Credit Risk to Social Impact: On the Funding Determinants in Interest-Free Peer-to-Peer Lending," Journal of Business Ethics, Springer, vol. 170(2), pages 375-400, May.
    14. Abrar, Afsheen & Hasan, Iftekhar & Kabir, Rezaul, 2021. "Finance-growth nexus and banking efficiency: The impact of microfinance institutions," Journal of Economics and Business, Elsevier, vol. 114(C).
    15. Emanuel-Correia, Ricardo & Duarte, Fábio & Gama, Ana Paula Matias & Augusto, Mário, 2022. "Does peer-to-peer crowdfunding boost refugee entrepreneurs?," Finance Research Letters, Elsevier, vol. 46(PA).
    16. Radhakrishnan, Smitha, 2015. "“Low Profile” or Entrepreneurial? Gender, Class, and Cultural Adaptation in the Global Microfinance Industry," World Development, Elsevier, vol. 74(C), pages 264-274.
    17. Fang, Xing, 2022. "Why we hide good deeds? The selfless and anonymous donation behavior in crowdfunding," Technology in Society, Elsevier, vol. 71(C).
    18. Ana Paula Matias Gama & Ricardo Emanuel Correia & Mário Augusto & Fábio Duarte, 2023. "Third-party signals in crowdfunded microfinance: which microfinance institutions boost crowdfunding among refugee entrepreneurs?," Small Business Economics, Springer, vol. 61(2), pages 559-586, August.
    19. repec:bla:annpce:v:89:y:2018:i:1:p:125-155 is not listed on IDEAS
    20. Yoo, Jenny Jeongeun & Song, Sangyoung & Jhang, Jihoon, 2022. "Overhead aversion and facial expressions in crowdfunding," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    21. Kollenda, Philipp, 2022. "Financial returns or social impact? What motivates impact investors’ lending to firms in low-income countries," Journal of Banking & Finance, Elsevier, vol. 136(C).
    22. Dorfleitner, Gregor & Oswald, Eva-Maria & Röhe, Michaela, 2020. "The access of microfinance institutions to financing via the worldwide crowd," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 133-146.
    23. Danielle Logue & Matthew Grimes, 2022. "Platforms for the people: Enabling civic crowdfunding through the cultivation of institutional infrastructure," Strategic Management Journal, Wiley Blackwell, vol. 43(3), pages 663-693, March.

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