IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v32y2020i7p1075-1100.html
   My bibliography  Save this article

The Social and Financial Performance of Microfinance Institutions in the Middle East and North Africa Region: Do Islamic Institutions Outperform Conventional Institutions?

Author

Listed:
  • I. Berguiga
  • Y.Ben Said
  • P. Adair

Abstract

The performance of microfinance institutions (MFIs) is analysed over 2004–2015 on a sample of 67 MFIs in the Middle East and North Africa regions. It includes a subsample of 18 Islamic MFIs (IMFIs), whereof Solebusiness grant exclusively Islamic financial services, and Window provide both Islamic and conventional services. A model of simultaneous equations with interacting variables tests seven hypotheses addressing financial performance, social performance and the social and financial performance relationship. Conventional MFIs experience higher financial performance than IMFIs, and Window experience higher financial performance than Solebusiness. IMFIs do not experience higher social performance than conventional MFIs; whether conventional or Islamic, MFIs face a financial vs. social performance trade‐off. © 2020 John Wiley & Sons, Ltd.

Suggested Citation

  • I. Berguiga & Y.Ben Said & P. Adair, 2020. "The Social and Financial Performance of Microfinance Institutions in the Middle East and North Africa Region: Do Islamic Institutions Outperform Conventional Institutions?," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(7), pages 1075-1100, October.
    • Handle: RePEc:wly:jintdv:v:32:y:2020:i:7:p:1075-1100
    DOI: 10.1002/jid.3488
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3488
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3488?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
    ---><---

    References listed on IDEAS

    as
    1. Hartarska, Valentina M., 2005. "Governance and Performance of Microfinance Institutions in Central and Eastern Europe and the Newly Independent States," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24568, European Association of Agricultural Economists.
    2. Steven B. Caudill & Daniel M. Gropper & Valentina Hartarska, 2009. "Which Microfinance Institutions Are Becoming More Cost Effective with Time? Evidence from a Mixture Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(4), pages 651-672, June.
    3. Hartarska, Valentina, 2005. "Governance and performance of microfinance institutions in Central and Eastern Europe and the Newly Independent States," World Development, Elsevier, vol. 33(10), pages 1627-1643, October.
    4. Ines Ben Abdelkader & Asma Ben Salem, 2013. "Islamic vs Conventional Microfinance Institutions: Performance analysis in MENA countries," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(5), pages 218-233, May.
    5. Ayi Gavriel Ayayi & Maty Sene, 2010. "What drives microfinance institution's financial sustainability," Journal of Developing Areas, Tennessee State University, College of Business, vol. 44(1), pages 303-324, September.
    6. Philippe Adair & Imène Berguiga, 2015. "The interest rates and performance of MFIs in the MENA region: is there a moral issue?," Post-Print hal-01667342, HAL.
    7. Douglas Cumming & Yizhe Dong & Wenxuan Hou & Binayak Sen (ed.), 2017. "Microfinance for Entrepreneurial Development," Springer Books, Springer, number 978-3-319-62111-1, June.
    8. Morduch, Jonathan, 2000. "The Microfinance Schism," World Development, Elsevier, vol. 28(4), pages 617-629, April.
    9. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    10. El-Komi, Mohamed & Croson, Rachel, 2013. "Experiments in Islamic microfinance," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 252-269.
    11. Widiarto, Indra & Emrouznejad, Ali, 2015. "Social and financial efficiency of Islamic microfinance institutions: A Data Envelopment Analysis application," Socio-Economic Planning Sciences, Elsevier, vol. 50(C), pages 1-17.
    12. Philippe Adair & Imene Berguiga, 2014. "How do social performance and financial performance of microfinance institutions interact: A panel data study upon the MENA region (1998-2011)," Post-Print hal-01667328, HAL.
    13. Hermes, Niels & Lensink, Robert & Meesters, Aljar, 2011. "Outreach and Efficiency of Microfinance Institutions," World Development, Elsevier, vol. 39(6), pages 938-948, June.
    14. Bert D'espallier & Isabelle Guerin & Roy Mersland, 2013. "Focus on Women in Microfinance Institutions," Journal of Development Studies, Taylor & Francis Journals, vol. 49(5), pages 589-608, May.
    15. Hafiz Zahid Mahmood & Roheel Khan & Bilal Mehmood & Muhammad Khan, 2014. "Efficiency Analysis of Conventional vs. Islamic Microfinance: An Appraisal for Sustainability in Pakistan," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 3(4), pages 192-201.
    16. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    17. Kerstin Lopatta & Magdalena Tchikov & Reemda Jaeschke & Sumit Lodhia, 2017. "Sustainable Development and Microfinance: The Effect of Outreach and Profitability on Microfinance Institutions' Development Mission," Sustainable Development, John Wiley & Sons, Ltd., vol. 25(5), pages 386-399, September.
    18. Ines Ben Abdelkader & Asma Ben Salem, 2013. "Islamic vs Conventional Microfinance Institutions: Performance analysis in MENA countries," International Journal of Business and Social Research, LAR Center Press, vol. 3(5), pages 218-233, May.
    19. Ahmed, Habib, 2002. "Financing Microenterprises: An Analytical Study Of Islamic Microfinance Institutions," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 9, pages 28-64.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Philippe Adair & Imène Berguiga, 2021. "A survey on funding MSMEs and female entrepreneurs in MENA countries and the microfinance issue," Erudite Working Paper 2021-12, Erudite.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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).
    3. Ahmad, Syedah & Lensink, Robert & Mueller, Annika, 2020. "The double bottom line of microfinance: A global comparison between conventional and Islamic microfinance," World Development, Elsevier, vol. 136(C).
    4. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    5. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    6. Wijesiri, Mahinda & Yaron, Jacob & Meoli, Michele, 2017. "Assessing the financial and outreach efficiency of microfinance institutions: Do age and size matter?," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 63-76.
    7. Mira Nurmakhanova & Gavin Kretzschmar & Hassouna Fedhila, 2015. "Trade-off between financial sustainability and outreach of microfinance institutions," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 231-250, December.
    8. Imène Berguiga & Yosra Said & Philippe Adair, 2017. "The social and financial performance of Microfinance institutions in the MENA region: Do Islamic institutions perform better?," Post-Print hal-01667406, HAL.
    9. Wijesiri, Mahinda & Yaron, Jacob & Meoli, Michele, 2015. "Performance of microfinance institutions in achieving the poverty outreach and financial sustainability: When age and size matter?," MPRA Paper 69821, University Library of Munich, Germany.
    10. 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.
    11. Janda, Karel & Zetek, Pavel, 2014. "Mikrofinanční Revoluce: Aktuální Kontroverze A Výzvy [Microfinance Revolution: Recent Controversies And Challenges]," MPRA Paper 54098, University Library of Munich, Germany.
    12. Janda, Karel & Zetek, Pavel, 2014. "Survey of Microfinance Controversies and Challenges," MPRA Paper 56657, University Library of Munich, Germany.
    13. Simon Cornée & Gervais Thenet, 2016. "Efficience des institutions de microfinance en Bolivie et au Pérou:une approche data envelopment analysis en deux étapes," Revue Finance Contrôle Stratégie, revues.org, vol. 19(1), pages 65-91, March.
    14. Agier, Isabelle & Szafarz, Ariane, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," World Development, Elsevier, vol. 42(C), pages 165-181.
    15. Karel Janda & Pavel Zetek, 2015. "Mikrofinanční revoluce: kontroverze a výzvy [Microfinance Revolution: Controversies and Challenges]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(1), pages 108-130.
    16. Al-Azzam, Moh'd & Mimouni, Karim & Smaoui, Houcem & Temimi, Akram, 2022. "Subsidies vs. deposits and cost inefficiency in microfinance," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 212-235.
    17. N’Guessan, Marie Noëlle & Hartarska, Valentina, 2021. "Funding for BOP in Emerging Markets: Organizational Forms and Capital Structures of Microfinance Institutions," Research in International Business and Finance, Elsevier, vol. 58(C).
    18. Beisland, Leif Atle & Mersland, Roy & Randøy, Trond, 2014. "The Association between microfinance rating scores and corporate governance: a global survey," International Review of Financial Analysis, Elsevier, vol. 35(C), pages 268-280.
    19. Moez Bennouri & Anastasia Cozarenco & Samuel Anokye Nyarko, 2024. "Women on Boards and Performance Trade-offs in Social Enterprises: Insights from Microfinance," Journal of Business Ethics, Springer, vol. 190(1), pages 165-198, February.
    20. Adalessossi, Kokou, 2024. "What are the determinants of the financial and social performance of MFIs in Togo? Does gender borrower matter on financial performance?," Finance Research Letters, Elsevier, vol. 62(PA).

    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:wly:jintdv:v:32:y:2020:i:7:p:1075-1100. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    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.