IDEAS home Printed from https://ideas.repec.org/p/sol/wpaper/2013-103401.html
   My bibliography  Save this paper

Performance and international investments in microfinance institutions

Author

Listed:
  • Roy Mersland
  • Ludovic Urgeghe

Abstract

Using data from 319 microfinance institutions (MFIs) in 68 developing countries, we study the degree to which international debt investments are related to the financial and social performances of MFIs. We find that commercial investments are mainly related to financial performance and level of professionalisation of the MFIs. The targeting of women is not a priority, even though international commercial investors target MFIs that provide small loans. Subsidised investments, however, are mainly driven by the targeting of women, while financial performance and the level of professionalisation of the MFI is not a priority.

Suggested Citation

  • Roy Mersland & Ludovic Urgeghe, 2011. "Performance and international investments in microfinance institutions," Working Papers CEB 11-054, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:2013/103401
    as

    Download full text from publisher

    File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/103401/1/wp11054.pdf
    File Function: wp11054
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mersland, Roy & Strøm, R. Øystein, 2010. "Microfinance Mission Drift?," World Development, Elsevier, vol. 38(1), pages 28-36, January.
    2. Mark Schreiner, 2002. "Aspects of outreach: a framework for discussion of the social benefits of microfinance," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(5), pages 591-603.
    3. Renneboog, Luc & Ter Horst, Jenke & Zhang, Chendi, 2008. "Socially responsible investments: Institutional aspects, performance, and investor behavior," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1723-1742, September.
    4. D'Espallier, Bert & Guérin, Isabelle & Mersland, Roy, 2011. "Women and Repayment in Microfinance: A Global Analysis," World Development, Elsevier, vol. 39(5), pages 758-772, May.
    5. Robert Cull & Asli Demirguç-Kunt & Jonathan Morduch, 2007. "Financial performance and outreach: a global analysis of leading microbanks," Economic Journal, Royal Economic Society, vol. 117(517), pages 107-133, February.
    6. Bogan, Vicki, 2008. "Microfinance Institutions: Does Capital Structure Matter?," Working Papers 51125, Cornell University, Department of Applied Economics and Management.
    7. Ludovic Urgeghe, 2010. "Les véhicules d'investissement en microfinance et le défi de la performance sociale," Mondes en développement, De Boeck Université, vol. 0(4), pages 69-82.
    8. Mersland, Roy & Øystein Strøm, R., 2009. "Performance and governance in microfinance institutions," Journal of Banking & Finance, Elsevier, vol. 33(4), pages 662-669, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. D’Espallier, Bert & Goedecke, Jann & Hudon, Marek & Mersland, Roy, 2017. "From NGOs to Banks: Does Institutional Transformation Alter the Business Model of Microfinance Institutions?," World Development, Elsevier, vol. 89(C), pages 19-33.
    2. D. Pascal & R. Mersland & N. Mori, 2017. "The influence of the CEO’s business education on the performance of hybrid organizations: the case of the global microfinance industry," Small Business Economics, Springer, vol. 49(2), pages 339-354, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    2. Bos, Jaap W.B. & Millone, Matteo, 2015. "Practice What You Preach: Microfinance Business Models and Operational Efficiency," World Development, Elsevier, vol. 70(C), pages 28-42.
    3. Dorfleitner, Gregor & Röhe, Michaela & Renier, Noémie, 2017. "The access of microfinance institutions to debt capital: An empirical investigation of microfinance investment vehicles," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 1-15.
    4. A. Blanco-Oliver & A. Irimia-Diéguez, 2021. "Impact of outreach on financial performance of microfinance institutions: a moderated mediation model of productivity, loan portfolio quality, and profit status," Review of Managerial Science, Springer, vol. 15(3), pages 633-668, April.
    5. Blanco-Oliver, Antonio & Irimia-Dieguez, Ana & Reguera-Alvarado, Nuria, 2016. "Prediction-oriented PLS path modeling in microfinance research," Journal of Business Research, Elsevier, vol. 69(10), pages 4643-4649.
    6. Dorfleitner, Gregor & Priberny, Christopher & Röhe, Michaela, 2017. "Why do microfinance institutions fail socially? A global empirical examination," Finance Research Letters, Elsevier, vol. 22(C), pages 81-89.
    7. Kendo, Sandra & Tchakounte, Josephine, 2022. "The drivers of the financial integration of microfinance Institutions: Do financial development, agency costs and microfinance performance matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 128-142.
    8. Mira Nurmakhanova & Gavin Kretzschmar & Hassouna Fedhila, 2015. "Trade-off between financial sustainability and outreach of microfinance institutions," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 231-250, December.
    9. Beisland, Leif Atle & Mersland, Roy & Randøy, Trond, 2014. "The Association between microfinance rating scores and corporate governance: a global survey," International Review of Financial Analysis, Elsevier, vol. 35(C), pages 268-280.
    10. Moez Bennouri & Anastasia Cozarenco & Samuel Anokye Nyarko, 2024. "Women on Boards and Performance Trade-offs in Social Enterprises: Insights from Microfinance," Journal of Business Ethics, Springer, vol. 190(1), pages 165-198, February.
    11. Ahmad, Syedah & Lensink, Robert & Mueller, Annika, 2020. "The double bottom line of microfinance: A global comparison between conventional and Islamic microfinance," World Development, Elsevier, vol. 136(C).
    12. Marek Hudon & Marc Labie & Patrick Reichert, 2020. "What is a Fair Level of Profit for Social Enterprise? Insights from Microfinance," Journal of Business Ethics, Springer, vol. 162(3), pages 627-644, March.
    13. Junyon Im & Sunny Sun, 2015. "Profits and outreach to the poor: The institutional logics of microfinance institutions," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 95-117, March.
    14. Simon Cornée & Gervais Thenet, 2016. "Efficience des institutions de microfinance en Bolivie et au Pérou:une approche data envelopment analysis en deux étapes," Revue Finance Contrôle Stratégie, revues.org, vol. 19(1), pages 65-91, March.
    15. Yimga, Jules, 2018. "Microfinance expansion and its effects on cost efficiency," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 205-216.
    16. Eline Auwera & Bert D’Espallier & Roy Mersland, 2024. "Achieving Double Bottom-Line Performance in Hybrid Organisations: A Machine-Learning Approach," Journal of Business Ethics, Springer, vol. 190(3), pages 625-647, March.
    17. 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.
    18. Chakravarty, Sugato & Pylypiv, Mariya I., 2015. "The Role of Subsidization and Organizational Status on Microfinance Borrower Repayment Rates," World Development, Elsevier, vol. 66(C), pages 737-748.
    19. Bibi, Uzma & Balli, Hatice Ozer & Matthews, Claire D. & Tripe, David W.L., 2018. "New approaches to measure the social performance of microfinance institutions (MFIs)," International Review of Economics & Finance, Elsevier, vol. 53(C), pages 88-97.
    20. Waleed Omri & Ridha Chkoundali, 2011. "The Convergence Between Outreach and Financial Performance in Mediterranean MFIs: A Panel Data Analysis," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(1), pages 149-163, September.

    More about this item

    Keywords

    microfinance; commercialisation; socially responsible investors; microfinance investment vehicles; social performance;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sol:wpaper:2013/103401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/cebulbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.