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Incentive scheme and productivity in microfinance institutions in Benin

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  • ACCLASSATO HOUENSOU, Denis
  • SENOU, Melain Modeste

Abstract

This article aims to analyze the productive effects of financial and non-financial incentive in microfinance institutions in Benin. We estimate a Cobb-Douglas production function augmented by the Incentive Scheme on an unbalanced panel of 14 registered MFIs over the period 2007-2017. The findings of this study show that non-financial incentives positively impact the outreach whereas the financial incentives have a negative effect on outreach. They further suggest that a well-designed incentive scheme is a powerful tool to overcome free riding and other asymmetric information problems in a costly monitoring environment.

Suggested Citation

  • ACCLASSATO HOUENSOU, Denis & SENOU, Melain Modeste, 2019. "Incentive scheme and productivity in microfinance institutions in Benin," MPRA Paper 95379, University Library of Munich, Germany, revised 02 Aug 2019.
    • Handle: RePEc:pra:mprapa:95379
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial incentive; Non-Financial Incentive; Productivity; MFI; Benin;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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