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

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Author Info
Marek Hudon () (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)

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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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File URL: http://www.solvay.edu/EN/Research/Bernheim/documents/wp05015.pdf
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File Function: First version, 2006
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Publisher Info
Paper provided by Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) in its series Working Papers CEB with number 05-015.RS.

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Length: 28 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:sol:wpaper:05-015

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

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Find related papers by JEL classification:
L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment
Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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