The access of microfinance institutions to financing via the worldwide crowd

The rising funding demand in the microfinance industry prompts microfinance institutions (MFIs) to seek additional, emergent debt capital sources such as crowdfunding. As the crowd-based approach has experienced widespread growth, we study the characteristics of MFIs having and using access to refinancing microloans via crowdfunding based on a panel data set obtained from the peer-to-peer microfinance platform Kiva. By performing binary regressions, we find evidence that the MFI's social performance regarding granting loans to women and the interest rate charged from borrowers are main predictors of refinancing through Kiva. We observe that mature MFIs exhibit better access to funding from Kiva than those which are new to the market. The results show that the likelihood of refinancing microloans through Kiva is negatively related to the financial performance and to the extent of deposits of an MFI. MFIs operating in less-developed countries appear to be more likely to have access to Kiva's refinancing model. Additionally, we examine those cases in which the partnership between the MFI and Kiva has been terminated and find strong evidence that MFIs with a high share of deposits are more likely to discontinue the partnership with Kiva.