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The social and financial performance of Microfinance institutions in the MENA region: Do Islamic institutions perform better?


  • Imène Berguiga
  • Yosra Said
  • Philippe Adair

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


This paper investigates the relationship between the financial performance and social performance of microfinance institutions (MFIs) from 10 countries of the Middle East and North Africa (MENA) region. Two models with interacting variables are applied to an unbalanced panel of 67 MFIs, including 18 Islamic ones (IMFIs), over the period 2004-2015. It distinguishes SolebusinessIMFIs granting exclusively Islamic services from Window IMFIs that diversify their services (Islamic and conventional). It tests five assumptions about the controversial superiority of IMFIs over conventional MFIs (CMFIs), with respect to their financial performance and social performance. Results show that MFIs, whether Islamic or conventional, face a financial vs. social performance trade-off. Window IMFIs experience higher financial performance than Solebusiness IMFIs and CMFIs. However, the three assumptions regarding financial performance are unverified. Outreach of the Solebusiness IMFIs differs from that of Window IMFIs and CMFIs. Nevertheless, the two assumptions concerning social performance are also unverified. Hence, there is no evidence that IMFIs exceed CMFIs.

Suggested Citation

  • 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.
  • Handle: RePEc:hal:journl:hal-01667406
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    References listed on IDEAS

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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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    More about this item


    Conventional Microfinance; Financial performance; Islamic Microfinance; MENA region; Panel data; Social performance;

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