IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v61y2025i5p1160-1176.html
   My bibliography  Save this article

Are All Deposit Products in the Microfinance World Created Equal?

Author

Listed:
  • Aleksandr Grigoryan
  • Knar Khachatryan
  • Valentina Hartarska
  • Roy Mersland

Abstract

Building on the economies of scope framework, we estimate how the use of mandatory deposits alone in credit-only microfinance institutions (MFIs) or in combination with voluntary deposits in credit-plus-deposit MFIs is associated with the performance of MFIs in terms of financial sustainability, breadth, and depth of outreach. We account for MFIs’ double bottom line with the seemingly unrelated regressions method and use data from 544 MFIs worldwide for the period 2000–2015. We show that, for credit-only MFIs, mandatory deposits are associated with improved depth of outreach to the poor. For credit-plus-deposit MFIs, we find a trade-off: mandatory deposits are associated with a decrease in financial sustainability but an increase in breadth of outreach. We also analyze the moderating role of mandatory deposits. High-risk loans collateralized by mandatory deposits are more likely to reach poorer clients in credit-only MFIs and help to reach more borrowers in credit-plus-deposit MFIs, but at a higher cost.

Suggested Citation

  • Aleksandr Grigoryan & Knar Khachatryan & Valentina Hartarska & Roy Mersland, 2025. "Are All Deposit Products in the Microfinance World Created Equal?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(5), pages 1160-1176, April.
    • Handle: RePEc:mes:emfitr:v:61:y:2025:i:5:p:1160-1176
    DOI: 10.1080/1540496X.2024.2413172
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2024.2413172
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2024.2413172?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:61:y:2025:i:5:p:1160-1176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.