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Surplus distribution and characteristics of social enterprises: Evidence from microfinance

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  • Hudon, Marek
  • Périlleux, Anaïs

Abstract

The issue of surplus distribution has hardly been analyzed in the context of the social economy. This paper highlights the main drivers of distribution between various stakeholders of microfinance institutions (MFIs), which are an example of social enterprises. We focus on three major variables: size, governance structure and subsidies. Our results show that the size of the institution is the main indicator of the surplus that the organization keeps as a self-financial margin. Moreover, MFIs with a cooperative ownership structure allocate a larger part of their surplus to their employees, whereas non-profit organizations and shareholder-firm MFIs do not allocate their surplus in a significantly different way among their main stakeholders. Finally, we do not find any clear-cut effect of subsidies on the surplus allocation process.

Suggested Citation

  • Hudon, Marek & Périlleux, Anaïs, 2014. "Surplus distribution and characteristics of social enterprises: Evidence from microfinance," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(2), pages 147-157.
    • Handle: RePEc:eee:quaeco:v:54:y:2014:i:2:p:147-157
    DOI: 10.1016/j.qref.2013.10.002
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    2. Tchakoute Tchuigoua, Hubert, 2018. "Which types of microfinance institutions decentralize the loan approval process?," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 237-244.
    3. D’Espallier, Bert & Goedecke, Jann & Hudon, Marek & Mersland, Roy, 2017. "From NGOs to Banks: Does Institutional Transformation Alter the Business Model of Microfinance Institutions?," World Development, Elsevier, vol. 89(C), pages 19-33.
    4. Périlleux, Anaïs & Szafarz, Ariane, 2015. "Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal," World Development, Elsevier, vol. 74(C), pages 437-452.
    5. Francis Awuku Darko, 2016. "Is there a mission drift in microfinance? Some new empirical evidence from Uganda," Studies in Economics 1603, School of Economics, University of Kent.
    6. Labie, Marc & Méon, Pierre-Guillaume & Mersland, Roy & Szafarz, Ariane, 2015. "Discrimination by microcredit officers: Theory and evidence on disability in Uganda," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 44-55.
    7. Annabel Vanroose, 2014. "Factors that explain the regional expansion of microfinance institutions in Peru," Working Papers CEB 14-030, ULB -- Universite Libre de Bruxelles.
    8. Julien VASTENAEKELS & Jérôme PELENC, 2018. "Investigating the potential of cooperatives to re-embed the economy: a multiple case study of food cooperatives in Belgium," CIRIEC Working Papers 1805, CIRIEC - Université de Liège.
    9. Andreas Karathanasopoulos & Chia Chun Lo & Xiaorong Ma & Zhenjiang Qin, 2021. "Maintaining cost and ruin probability," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 759-793, August.
    10. Tchakoute-Tchuigoua, Hubert & Soumaré, Issouf, 2019. "The effect of loan approval decentralization on microfinance institutions' outreach and loan portfolio quality," Journal of Business Research, Elsevier, vol. 94(C), pages 1-17.
    11. Marek Hudon & Marc Labie & Patrick Reichert, 2020. "What is a Fair Level of Profit for Social Enterprise? Insights from Microfinance," Journal of Business Ethics, Springer, vol. 162(3), pages 627-644, March.

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    More about this item

    Keywords

    Microfinance; Social enterprise; Surplus; Governance; Size; Subsidies; Cooperatives;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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