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Why Do Microfinance Institutions Go Green? An Exploratory Study

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  • Marion Allet

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Abstract

In recent years, in addition to financial and social objectives, the microfinance industry has started to look at its environmental bottom line. The objective of this paper is to identify why microfinance institutions (MFIs) decide to go green. Data was collected through a quantitative survey of 160 MFIs and qualitative semi-structured interviews of 23 MFIs’ top managers. Basing our analysis on the model of ecological responsiveness developed by Bansal and Roth (Acad Manag J 43(4):717–736, 2000 ), we discover that MFIs for which legitimation (stakeholder pressure) is the dominant driver tend to adopt a defensive approach and set up more superficial negative strategies to appear green. In contrast, MFIs for which social responsibility is the dominant driver tend to be more proactive and innovative and develop adapted financial and non-financial services to promote environmentally friendly practices. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Marion Allet, 2014. "Why Do Microfinance Institutions Go Green? An Exploratory Study," Journal of Business Ethics, Springer, vol. 122(3), pages 405-424, July.
  • Handle: RePEc:kap:jbuset:v:122:y:2014:i:3:p:405-424
    DOI: 10.1007/s10551-013-1767-2
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    References listed on IDEAS

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    1. Marion Allet & Marek Hudon, 2015. "Green Microfinance: Characteristics of Microfinance Institutions Involved in Environmental Management," Journal of Business Ethics, Springer, vol. 126(3), pages 395-414, February.
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    9. Jessica Schicks, 2010. "Microfinance Over-Indebtedness: Understanding its drivers and challenging the common myths," Working Papers CEB 10-048, ULB -- Universite Libre de Bruxelles.
    10. Céspedes-Lorente, José & Burgos-Jiménez, Jerónimo de & Álvarez-Gil, Maria José, 2003. "Stakeholders' environmental influence. An empirical analysis in the Spanish hotel industry," Scandinavian Journal of Management, Elsevier, vol. 19(3), pages 333-358, September.
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    6. Davide Forcella & Guja Lucheschi, 2016. "Microfinance and ecosystems conservation How green microfinance interacts with Socio- Ecological systems Lessons from Proyecto CAMBio in Nicaragua and Guatemala," Working Papers CEB 16-008, ULB -- Universite Libre de Bruxelles.

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