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The Impact of Social Beliefs on Microfinance Performance

Author

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  • Katarzyna Burzynska
  • Olle Berggren

Abstract

We apply a panel of 331 microfinance institutions from 37 countries to investigate the relationship between social beliefs and microfinance financial performance over the period of 2003–2011. We find that microfinance institutions in countries with higher levels of trust and more collectivist culture have lower operating and default costs and charge lower interest rates. These results provide the first large cross‐country evidence that social beliefs are important determinants of microfinance performance. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Katarzyna Burzynska & Olle Berggren, 2015. "The Impact of Social Beliefs on Microfinance Performance," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(7), pages 1074-1097, October.
    • Handle: RePEc:wly:jintdv:v:27:y:2015:i:7:p:1074-1097
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    Cited by:

    1. Xu, Shufang & Zhu, Ning & Copestake, James & Cai, Guiming & Peng, Xinman, 2024. "Is there a trade-off between MFls' financial efficiency and outreach in macroeconomic and institutional context?," International Review of Economics & Finance, Elsevier, vol. 94(C).
    2. Luminita Postelnicu & Niels Hermes, 2018. "Microfinance Performance and Social Capital: A Cross-Country Analysis," Journal of Business Ethics, Springer, vol. 153(2), pages 427-445, December.
    3. Saon Ray & Sandeep Paul & Smita Miglani, 2018. "Innovation, Efficiency and Inclusion: Integration of digital technologies in the Indian microfinance sector," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 366, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    4. Emmanuel Amissah & Katarzyna Świerczyńska, 2021. "Is Religion a Determinant of Financial Development?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(3), pages 233-247, August.
    5. Hermes, Cornelis & Hudon, M., 2018. "Determinants of the Performance of Microfinance Institutions: A Systematic Review," Research Report 2018008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    6. Chmelíková, Gabriela & Krauss, Annette & Dvouletý, Ondřej, 2019. "Performance of microfinance institutions in Europe—Does social capital matter?," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    7. Icíar García-Pérez & María Ángeles Fernández-Izquierdo & María Jesús Muñoz-Torres, 2020. "Microfinance Institutions Fostering Sustainable Development by Region," Sustainability, MDPI, vol. 12(7), pages 1-23, March.
    8. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    9. Fregidou-Malama, Maria & Hyder, Akmal S., 2024. "Constructing organizational culture in an international subsidiary: Elekta healthcare services in Greece," International Business Review, Elsevier, vol. 33(4).

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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