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Should microfinance institutions diversify or focus? A global analysis

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  • Zamore, Stephen

Abstract

This paper investigates the effects of revenue diversification on the financial performance of microfinance institutions (MFIs). The long-standing question about whether financial institutions should diversify or focus is a topic of ongoing debate. Using a global sample of MFIs, we investigate which view is appropriate for microfinance institutions. The results show that, diversification across revenue streams improves sustainability and profitability of MFIs. This suggests that revenue diversification is an important strategy for the sustainability of microfinance.

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  • Zamore, Stephen, 2018. "Should microfinance institutions diversify or focus? A global analysis," Research in International Business and Finance, Elsevier, vol. 46(C), pages 105-119.
    • Handle: RePEc:eee:riibaf:v:46:y:2018:i:c:p:105-119
    DOI: 10.1016/j.ribaf.2017.12.001
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    More about this item

    Keywords

    Revenue diversification; Financial performance; Microfinance; Sustainability; Profitability;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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