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Economic Freedom And The Success Of Microfinance Institutions

Author

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  • PETER CRABB

    (School of Business and Economics, Northwest Nazarene University, 623 Holly Street, Nampa, ID 83686, USA)

Abstract

This study looks at the relationship between the success of microfinance institutions and the degree of economic freedom in their host countries. Many microfinance institutions are currently not self-sustaining, and both theoretical and empirical work suggests that the economic environment in which they operate is an important factor in their ability to reach this goal, furthering the mission of outreach to the poor. The sustainability of the microfinance institutions is analyzed here using a large cross-section of institutions and countries. The results show that microfinance institutions operate primarily in countries with a relatively low degree of overall economic freedom and that government intervention in the economy can reduce their sustainability.

Suggested Citation

  • Peter Crabb, 2008. "Economic Freedom And The Success Of Microfinance Institutions," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 205-219.
    • Handle: RePEc:wsi:jdexxx:v:13:y:2008:i:02:n:s1084946708000934
    DOI: 10.1142/S1084946708000934
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    References listed on IDEAS

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    1. Sharma, Manohar, 2004. "Community-driven development and scaling-up of microfinance services," FCND briefs 178, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Virginie Allaire & Arvind Ashta & Laurence Attuel-Mendes & Karuna Krishnaswamy, 2009. "Institutional Analysis to explain the Success of Moroccan Microfinance Institutions," Working Papers CEB 09-057.RS, ULB -- Universite Libre de Bruxelles.
    2. Elsa Assiaty de L. A. Agostinho & Raquel M. Gaspar, 2021. "Efficiency of Microfinance Institutions:analysis of Southern African Development Community (SADC) member countries," Working Papers REM 2021/0172, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Fahana Ferdousi, 2013. "Determinants of Performance of Microfinance Institutions: Cross Country Analysis," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 1(4), pages 143-151.
    4. N. Ngoc B. & Н. Нгок Б., 2016. "Влияние Структуры Капитала И Юридического Статуса На Финансовую Устойчивость Микрофинансовых Институтов В Развивающихся Странах // The Effect Of Capital Structure And Legal Status On Financial Sustain," Review of Business and Economics Studies // Review of Business and Economics Studies, Финансовый Университет // Financial University, vol. 4(2), pages 53-64.
    5. M.Aruna & Rema Jyothirmayi, 2011. "The Role of Microfinance in Women Empowerment: A Study on the SHG Bank Linkage Program in Hyderabad (Andhra Pradesh)," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(4), pages 77-95, May.
    6. Dawood Ashraf & Muhammad Suhail Rizwan & Barbara L’Huillier, 2022. "Environmental, social, and governance integration: the case of microfinance institutions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 837-891, March.
    7. Michael E. Valdez & James Richardson, 2013. "Institutional Determinants of Macro–Level Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1149-1175, September.
    8. K. Branker & E. Shackles & J. M. Pearce, 2011. "Peer-to-peer financing mechanisms to accelerate renewable energy deployment," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 1(2), pages 138-155, April.
    9. Irene Akuamoah Boateng & Albert Agyei, 2013. "Microfinance in Ghana: Development, Success Factors and Challenges," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(4), pages 153-160, October.
    10. Jacob Yaron & Ronny Manos, 2010. "Information Transparency and Agency Costs in the Microfinance Industry," Review of Market Integration, India Development Foundation, vol. 2(1), pages 87-99, April.
    11. Nicolas A. LASH & Bala BATAVIA, 2016. "Government Policies And Micro Lending In Emerging Markets," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 9-32, June.
    12. Gul, Ferdinand A. & Podder, Jyotirmoy & Shahriar, Abu Zafar M., 2017. "Performance of Microfinance Institutions: Does Government Ideology Matter?," World Development, Elsevier, vol. 100(C), pages 1-15.
    13. Aruna Balammal & R. Madhumathi & M.P. Ganesh, 2016. "Pentagon Performance Model of Indian MFIs," Paradigm, , vol. 20(1), pages 1-13, June.

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