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 scrutinize 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 University Library of Munich, Germany in its series MPRA Paper with number 24649.
Date of creation: 2010
Date of revision:
Microfinance; Dual Objectives; Economic Governance; Property Rights; and Credit Information;
Other versions of this item:
- Arun, Thankom Gopinath & Annim, Samuel, 2010. "Economic Governance of MFIs: Inside the Black Box," IZA Discussion Papers 5159, Institute for the Study of Labor (IZA).
- Thankom Arun & Samuel Annim, 2010. "Economic governance of MFIs:Inside the black box," Brooks World Poverty Institute Working Paper Series, BWPI, The University of Manchester 13810, BWPI, The University of Manchester.
- Thankom Arun & Samuel Kobina Annim, 2010. "Economic Governance of MFIs: Inside the Black Box," Working Papers id:2817, eSocialSciences.
- G39 - Financial Economics - - Corporate Finance and Governance - - - Other
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
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- Aruna Chandra & Thankom Arun, 2011. "United States Microfinance: Regulating to Promote Growth?," NFI Working Papers, Indiana State University, Scott College of Business, Networks Financial Institute 2011-WP-28, Indiana State University, Scott College of Business, Networks Financial Institute.
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