Economic governance of MFIs:Inside the black box
AbstractThis paper investigates a relationship between economic governance and the dual objectives of microfinance institutions (MFIs): poverty reduction and financial viability. Using an unbalanced panel of 531 MFIs, the important role of other institutions, such as country-level business registry departments, in facilitating targeting of poor clients is illuminated. Comparing the estimates of Hausman-Taylor and Fixed Effects Vector Decomposition allows us to scrutinise and at least partially correct the effects of both time invariant and slow changing endogenous variables. We find that credit information availability and lesser time in securing property enhances the chances of MFIs in achieving their poverty reduction objective. Product diversification, leading to economies of scope, also enables MFIs to reach poor clients. On the basis of the above, it is imperative for government and development partners to channel their efforts towards provision of an enabling atmosphere that will enhance the achievement of microfinance social objectives.
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Bibliographic InfoPaper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number 13810.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Arun, Thankom & Annim, Samuel Kobina, 2010. "Economic Governance of MFIs: Inside the Black Box," MPRA Paper 24649, University Library of Munich, Germany.
- Arun, Thankom & Annim, Samuel Kobina, 2010. "Economic Governance of MFIs: Inside the Black Box," IZA Discussion Papers 5159, Institute for the Study of Labor (IZA).
- Thankom Arun & Samuel Kobina Annim, 2010. "Economic Governance of MFIs: Inside the Black Box," Working Papers id:2817, eSocialSciences.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G39 - Financial Economics - - Corporate Finance and Governance - - - Other
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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