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Subsidies and financial performances of the microfinance institutions: Does management matter?

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  • Marek Hudon

Abstract

This paper uses a unique database from a leading microfinance rating agency to assess the impact of management on the functioning of microfinance institutions (MFIs). It focuses on MFIs’ financial performance, and on the level of subsidies received. The results show that the management skills are associated to the financial performances. The technical, organisational and communication competences of the top managers seem to play a key role among the four management dimensions analysed by the rating agency. Furthermore, the level of subsidies granted has a very limited impact on management quality. Results show that the well-managed MFIs are not significantly older or active in corrupted countries.

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Bibliographic Info

Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 05-015.RS.

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Length: 28 p.
Date of creation: 2006
Date of revision:
Publication status: Published by:
Handle: RePEc:sol:wpaper:05-015

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Keywords: microfinance; subsidies; management; governance; non-profit; Latin AMerica.;

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References

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  1. Morduch, Jonathan, 1999. "The role of subsidies in microfinance: evidence from the Grameen Bank," Journal of Development Economics, Elsevier, vol. 60(1), pages 229-248, October.
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Cited by:
  1. Marie Briere & Ariane Szafarz, 2011. "Investment in Microfinance Equity: Risk, Return, and Diversification Benefits," Working Papers CEB 11-050, ULB -- Universite Libre de Bruxelles.

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