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What Determines Premium of MFIs in the Mena Region? A Panel Data Analysis (2004- 2014)

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  • Philippe Adair

    () (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Imene Berguiga

Abstract

This is the first paper to address the premium-social performance relationship upon an unbalanced panel of 66 microfinance institutions (MFIs) in the MENA region over 2004-2014. According to a fixed effects model using instrumental variables, financial sustainability is the primary determinant of premium (i.e. the financial margin), whereupon social performance has a positive albeit insignificant impact. Mature MFIs maintain financial sustainability and serve rather non-poor clients, although they tame interest rates.

Suggested Citation

  • Philippe Adair & Imene Berguiga, 2017. "What Determines Premium of MFIs in the Mena Region? A Panel Data Analysis (2004- 2014)," Post-Print hal-01667346, HAL.
  • Handle: RePEc:hal:journl:hal-01667346
    Note: View the original document on HAL open archive server: https://hal-upec-upem.archives-ouvertes.fr/hal-01667346
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    File URL: https://hal-upec-upem.archives-ouvertes.fr/hal-01667346/document
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    References listed on IDEAS

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    1. 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.
    2. Gregor Dorfleitner & Michaela Leidl & Christopher Priberny & Jakob von Mosch, 2013. "What determines microcredit interest rates?," Applied Financial Economics, Taylor & Francis Journals, vol. 23(20), pages 1579-1597, October.
    3. 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.
    4. Janda, Karel & Zetek, Pavel, 2013. "Macroeconomic factors influencing interest rates of microfinance institutions in Latin America," MPRA Paper 49973, University Library of Munich, Germany.
    5. Pablo Cotler & Deyanira Almazan, 2010. "The Lending Interest Rates in the Microfinance Sector: Searching for its Determinants," Working Papers 0110, Universidad Iberoamericana, Department of Economics.
    6. 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.
    7. Mersland, Roy & Øystein Strøm, R., 2009. "Performance and governance in microfinance institutions," Journal of Banking & Finance, Elsevier, vol. 33(4), pages 662-669, April.
    8. Roberts, Peter W., 2013. "The Profit Orientation of Microfinance Institutions and Effective Interest Rates," World Development, Elsevier, vol. 41(C), pages 120-131.
    9. Philippe ADAIR & Imène BERGUIGA, 2010. "Les Facteurs Déterminants De La Performance Sociale Et De La Performance Financière Des Institutions De Microfinance Dans La Région Mena : Une Analyse En Coupe Instantanée," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 32, pages 91-120.
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    Keywords

    Social performance; Financial margin; Interest rates; MENA region; Microfinance institutions;

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