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Impact of global financial crunch on financially innovative microfinance institutions in South Asia

Author

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  • Faisal Mustafa

    (UCP Business School, Faculty of Management Studies, University of Central Punjab)

  • Ambreen Khursheed

    (UCP Business School, Faculty of Management Studies, University of Central Punjab)

  • Maham Fatima

    (UCP Business School, Faculty of Management Studies, University of Central Punjab)

Abstract

The wave of global financial crises (2008–2009) caused a surge in the capital flows of developed countries particularly, between developed and developing countries. The crunch hit all financial sectors with unanticipated severity. The study evaluates the role of a country’s political practices in moderating the impact of global financial crunch on microfinance performance. Using the fixed effect panel regression method on the dataset comprising of 95 MFIs operating in South Asia from 2003 to 2012, we determine that microfinance operational capability shares a positive relationship with the institutional attributes of a country and our output reveals that impact of country’s political practices is pervasive on the financial output of MFIs, liable to different levels of implementation. The findings further reveals that MFIs situated in countries having vigorous political practices are less severely affected by the economic crunch.

Suggested Citation

  • Faisal Mustafa & Ambreen Khursheed & Maham Fatima, 2018. "Impact of global financial crunch on financially innovative microfinance institutions in South Asia," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-11, December.
    • Handle: RePEc:spr:fininn:v:4:y:2018:i:1:d:10.1186_s40854-018-0099-8
    DOI: 10.1186/s40854-018-0099-8
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    3. Md Aslam Mia & Hasanul Banna & Abu Hanifa Md Noman & Md Rabiul Alam & Md. Sohel Rana, 2022. "Factors affecting borrowers’ turnover in microfinance institutions: A panel evidence," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(1), pages 55-84, March.
    4. Ambreen Khursheed, 2022. "Exploring the role of microfinance in women’s empowerment and entrepreneurial development: a qualitative study," Future Business Journal, Springer, vol. 8(1), pages 1-13, December.
    5. Khursheed, Ambreen & Fatima, Maham & Mustafa, Faisal & Nawaz Lodhi, Rab & Akhtar, Ayesha, 2021. "An Empirical Analysis of the Factors Influencing Social Entrepreneurship: A Gendered Approach," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    6. Wei Li & Serhat Yüksel & Hasan Dinçer, 2022. "Understanding the financial innovation priorities for renewable energy investors via QFD-based picture fuzzy and rough numbers," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-30, December.
    7. So Young Sohn & Yonghan Ju, 2023. "Mission Efficiency Analysis of For-Profit Microfinance Institutions with Categorical Output Variables," Sustainability, MDPI, vol. 15(3), pages 1-12, February.

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