IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v42y2021i3p710-723.html

Drivers of credit union penetration: An international analysis

Author

Listed:
  • Michael Adusei
  • Ngozi Adeleye
  • Anthony Okafor

Abstract

We investigate the drivers of credit union penetration with data from 90 countries for the period 2005–2017. Generally, the results show that the number of credit unions, the level of financial development of a country, the level of industrialization of a country, and the institutional environment are significantly supportive of credit union penetration. We conclude that the elimination of restrictions on the formation of credit unions (if any), the adoption of industrialization as development path, the implementation of sound monetary and fiscal policies that promote financial development, and the pursuit of good public governance are crucial for credit union penetration.

Suggested Citation

  • Michael Adusei & Ngozi Adeleye & Anthony Okafor, 2021. "Drivers of credit union penetration: An international analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(3), pages 710-723, April.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:3:p:710-723
    DOI: 10.1002/mde.3267
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.3267
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.3267?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. Abrate, Graziano & Piacenza, Massimiliano & Vannoni, Davide, 2009. "The impact of Integrated Tariff Systems on public transport demand: Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 120-127, March.
    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. 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.
    4. Annabel Vanroose & Bert D’Espallier, 2013. "Do microfinance institutions accomplish their mission? Evidence from the relationship between traditional financial sector development and microfinance institutions’ outreach and performance," Applied Economics, Taylor & Francis Journals, vol. 45(15), pages 1965-1982, May.
    5. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    6. Liñares-Zegarra, José & Wilson, John O.S., 2018. "The size and growth of microfinance institutions," The British Accounting Review, Elsevier, vol. 50(2), pages 199-213.
    7. World Bank, 2007. "Providing Financial Services in Rural Areas : A Fresh Look at Financial Cooperatives," World Bank Publications - Reports 7935, The World Bank Group.
    8. McKillop, Donal G. & Quinn, Barry, 2017. "Irish credit unions: Differential regulation based on business model complexity," The British Accounting Review, Elsevier, vol. 49(2), pages 230-241.
    9. Tarcisio Pedro Da Silva & Mauricio Leite & Jaqueline Carla Guse & Vanderlei Gollo, 2017. "Financial and economic performance of major Braziliancredit cooperatives," Contaduría y Administración, Accounting and Management, vol. 62(5), pages 5-6, Diciembre.
    10. Karima Saci & Gianluigi Giorgioni & Ken Holden, 2009. "Does financial development affect growth?," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1701-1707.
    11. Ahlin, Christian & Lin, Jocelyn & Maio, Michael, 2011. "Where does microfinance flourish? Microfinance institution performance in macroeconomic context," Journal of Development Economics, Elsevier, vol. 95(2), pages 105-120, July.
    12. Tchakoute Tchuigoua, Hubert, 2016. "Buffer capital in microfinance institutions," Journal of Business Research, Elsevier, vol. 69(9), pages 3523-3537.
    13. Strøm, Reidar Øystein & D’Espallier, Bert & Mersland, Roy, 2014. "Female leadership, performance, and governance in microfinance institutions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 42, pages 60-75.
    14. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2013. "The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 18-33.
    15. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    16. Benjamin Amoah & Anthony Q.Q. Aboagye & Godfred A. Bokpin & Kwaku Ohene‐Asare, 2018. "Firm Specific, Financial Development and Macroeconomic Determinants of Credit Union Lending," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(7), pages 1203-1222, October.
    17. Goddard, John & McKillop, Donal & Wilson, John O.S., 2008. "The diversification and financial performance of US credit unions," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1836-1849, September.
    18. Donal G. McKillop & John O.S. Wilson, 2015. "Credit Unions as Cooperative Institutions: Distinctiveness, Performance and Prospects," Social and Environmental Accountability Journal, Taylor & Francis Journals, vol. 35(2), pages 96-112, September.
    19. Dorfleitner, G. & Just-Marx, S. & Priberny, C., 2017. "What drives the repayment of agricultural micro loans? Evidence from Nicaragua," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 89-100.
    20. Matemilola, Bolaji Tunde & Bany-Ariffin, A.N. & Azman-Saini, W.N.W. & Nassir, Annuar Md, 2019. "Impact of institutional quality on the capital structure of firms in developing countries," Emerging Markets Review, Elsevier, vol. 39(C), pages 175-209.
    21. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    22. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    23. Yobouet Thierry Bienvenu Gnangoin & Liangsheng Du & GuyRoland Assamoi & Akadje JeanRoland Edjoukou & Diby François Kassi, 2019. "Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach," Economies, MDPI, vol. 7(4), pages 1-15, November.
    24. Hessou, Helyoth & Lai, Van Son, 2017. "Basel III capital buffer requirements and credit union prudential regulation: Canadian evidence," Journal of Financial Stability, Elsevier, vol. 30(C), pages 92-110.
    25. Tai-Yuan Chen & Lie-Jane Kao, 2014. "Dividend changes and information about future profitability: an application of difference GMM," Applied Economics Letters, Taylor & Francis Journals, vol. 21(7), pages 505-508, May.
    26. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LLC, vol. 9(1), pages 86-136, March.
    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. Beatrice Sarpong‐Danquah & Michael Adusei & Joseph Magnus Frimpong, 2023. "Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 495-518, June.
    2. Ramjeevan Prasad Das & Manish Kumar Jha & Amit Prakash Jha, 2025. "Evaluating Financial Efficiency of Microfinance Institutions: Evidence From India," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(5), pages 2968-2985, July.
    3. María Jesús Segovia‐Vargas & I. Marta Miranda‐García & Freddy Alejandro Oquendo‐Torres, 2023. "Sustainable finance: The role of savings and credit cooperatives in Ecuador," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 951-980, September.
    4. Michael Adusei & Kwasi Poku & Samuel Akomea, 2023. "Manager bonding and the technical efficiency of cooperative credit unions‐parametric and non‐parametric analyses," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(4), pages 1085-1109, December.

    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. Hessou, Hélyoth T.S. & Lensink, Robert & Soumaré, Issouf & Tchakoute Tchuigoua, Hubert, 2021. "Provisioning over the business cycle: Some insights from the microfinance industry," International Review of Financial Analysis, Elsevier, vol. 77(C).
    2. Beatrice Sarpong‐Danquah & Michael Adusei & Joseph Magnus Frimpong, 2023. "Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 495-518, June.
    3. Adusei, Michael, 2021. "Interest rate and the social performance of microfinance institutions," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 21-30.
    4. Hossain, Shahadat & Hossain, Md Mosharraf & Chong, Vincent K., 2025. "Do client protection principles matter for the economic and social performance of microfinance institutions?," The British Accounting Review, Elsevier, vol. 57(4).
    5. Soumaré, Issouf & Tchakoute Tchuigoua, Hubert & Hessou, Hélyoth T.S., 2020. "Are microfinance institutions resilient to economic slowdown? Evidence from their capital ratio adjustment over the business cycle," Economic Modelling, Elsevier, vol. 92(C), pages 1-22.
    6. Zamore, Stephen & Beisland, Leif Atle & Mersland, Roy, 2019. "Geographic diversification and credit risk in microfinance," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 109, pages 1-13.
    7. Mohamed, Toka S. & Elgammal, Mohammed M., 2023. "Credit risk in Islamic microfinance institutions: The role of women, groups, and rural borrowers," Emerging Markets Review, Elsevier, vol. 54(C).
    8. Beatrice Sarpong‐Danquah & Michael Adusei & Joseph Magnus Frimpong, 2023. "The capital structure–firm performance nexus: The role of judicial efficiency," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1585-1600, April.
    9. Huy Quang Doan, 2019. "Trade, Institutional Quality and Income: Empirical Evidence for Sub-Saharan Africa," Economies, MDPI, vol. 7(2), pages 1-23, May.
    10. Aditi Bhattacharyya, 2012. "Adjustment of inputs and measurement of technical efficiency: A dynamic panel data analysis of the Egyptian manufacturing sectors," Empirical Economics, Springer, vol. 42(3), pages 863-880, June.
    11. Munisi, Gibson Hosea & Mersland, Roy, 2016. "Ownership, Board Compensation and Company Performance in Sub-Saharan African Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(2), pages 191-224.
    12. Jean-Pierre Allegret & Sana Azzabi, 2014. "Intégration financière internationale et croissance économique dans les pays émergents et en développement : le canal du développement financier," Revue d’économie du développement, De Boeck Université, vol. 22(3), pages 27-68.
    13. Singh, Sunny Kumar & Bhattacharya, Kaushik, 2017. "Does easy availability of cash affect corruption? Evidence from a panel of countries," Economic Systems, Elsevier, vol. 41(2), pages 236-247.
    14. Colin Cannonier & Monica Galloway Burke, 2019. "The economic growth impact of tourism in Small Island Developing States—evidence from the Caribbean," Tourism Economics, , vol. 25(1), pages 85-108, February.
    15. Pinaki Chakraborty & Bharatee Bhusana Dash, 2017. "Fiscal Reforms, Fiscal Rule, and Development Spending: How Indian States Have Performed?," Public Budgeting & Finance, Wiley Blackwell, vol. 37(4), pages 111-133, December.
    16. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    17. Das, Papri, 2025. "Unlocking potentials: The impact of human capital investment in youth informal employment in emerging markets and developing economies," International Journal of Educational Development, Elsevier, vol. 116(C).
    18. Sascha Tobias Wengerek & Benjamin Hippert & André Uhde, 2019. "Risk allocation through securitization - Evidence from non-performing loans," Working Papers Dissertations 58, Paderborn University, Faculty of Business Administration and Economics.
    19. Rahman, Mizanur, 2008. "The Impact of a Common Currency on East Asian Production Networks and China’s Exports Behavior," MPRA Paper 13931, University Library of Munich, Germany.
    20. Tarik Dogru & Umit Bulut & Ercan Sirakaya-Turk, 2021. "Modeling tourism demand: Theoretical and empirical considerations for future research," Tourism Economics, , vol. 27(4), pages 874-889, June.

    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:mgtdec:v:42:y:2021:i:3:p:710-723. 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/cgi-bin/jhome/7976 .

    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.