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The Impact of Governance and Institutional Quality on MFI Outreach and Financial Performance in Sub-Saharan Africa

Listed author(s):
  • Thierno Amadou Barry

    ()

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société)

  • Ruth Tacneng

    ()

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société)

his paper examines whether shareholder-owned MFIs financially and socially perform better than NGOs in sub-Saharan Africa (SSA). We also investigate the role of institutional quality in altering MFIs' incentives and behavior in determining outreach. Our results indicate that NGOs are more profitable and have better outreach than banks and cooperatives. While a weak rule of law favors relationship-based exchanges and thus, results in NGO superiority, stronger institutional quality may encourage banks to cater to more borrowers, hence, shareholder-owned MFIs do not socially perform differently from NGOs. Overall, this study shows that NGOs are the best conduits of microfinance in SSA.

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Paper provided by HAL in its series Post-Print with number hal-00941134.

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Date of creation: 2014
Publication status: Published in World Development, Elsevier, 2014, 58, pp.1-20. <10.1016/j.worlddev.2013.12.006>
Handle: RePEc:hal:journl:hal-00941134
DOI: 10.1016/j.worlddev.2013.12.006
Note: View the original document on HAL open archive server: https://hal-unilim.archives-ouvertes.fr/hal-00941134
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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