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What macro factors make microfinance institutions reach out?


  • Annabel Vanroose


This paper identifies factors that explain why microfinance institutions are reaching more clients in some countries than in others. To that end, the paper applies a cross-country analysis on a unique dataset covering 115 countries. Results indicate that the microfinance sector is more present in the richer countries of the developing world. It also reaches more clients in countries that receive more international support. Population density plays also a positive role, which could explain why the sector is still underdeveloped in rural areas. The level of industrialisation and inflation do not seem to influence microfinance outreach, while regional dummies do.

Suggested Citation

  • Annabel Vanroose, 2008. "What macro factors make microfinance institutions reach out?," Working Papers CEB 08-036.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:08-036

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    References listed on IDEAS

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    Cited by:

    1. Jaffery, Ada & Mamoon, Dawood, 2015. "Socio-economic Perspective of Microfinance as a poverty reduction tool," MPRA Paper 81485, University Library of Munich, Germany.
    2. Dlamini, Menzie S., 2012. "The effect of subsidies on the performance and sustainability of microfinance institutions in sub-Saharan Africa," Research Theses 134487, Collaborative Masters Program in Agricultural and Applied Economics.
    3. Nargiza Alimukhamedova, 2014. "Microfinance Environment in Uzbekistan: Analysis of Supply and Demand," Working Papers 344, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    4. Alimukhamedova, Nargiza & Hanousek, Jan, 2015. "What Do We Know about Microfinance at Macro Glance?," CEPR Discussion Papers 10484, C.E.P.R. Discussion Papers.
    5. Nargiza Maksudova, 2010. "Macroeconomics of Microfinance: How Do the Channels Work?," CERGE-EI Working Papers wp423, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    6. Janda, Karel & Tran, Quang & Zetek, Pavel, 2014. "Vliv externího financování na mikrofinanční rozvoj - makro perspektiva
      [Influence of external funding on microfinance performance - macro perspective]
      ," MPRA Paper 58166, University Library of Munich, Germany.
    7. Marek Hudon, 2010. "Management of microfinance institutions: Do subsidies matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 890-905.
    8. Annabel Vanroose & Bert D’Espallier, 2009. "Microfinance and Financial Sector Development," Working Papers CEB 09-040.RS, ULB -- Universite Libre de Bruxelles.
    9. Janda, Karel & Zetek, Pavel, 2014. "The Impact of Public Spending on the Performance of Microfinance Institutions," MPRA Paper 55690, University Library of Munich, Germany.
    10. Alfiah Hasanah & Arief Anshory Yusuf, 2013. "Determinants of the Establishment of Islamic Micro Finance Institutions: The Case of Baitul Maal wa Tamwil (BMT) in Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 201308, Department of Economics, Padjadjaran University, revised Mar 2013.
    11. Arvind Ashta & Marek Hudon, 2009. "To whom should we be fair? Ethical issues in Balancing Stakeholder Interests from Banco Compartamos Case Study," Working Papers CEB 09-036.RS, ULB -- Universite Libre de Bruxelles.
    12. Nicolas A. LASH & Bala BATAVIA, 2016. "Government Policies And Micro Lending In Emerging Markets," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 9-32, June.
    13. Dlamini, Menzie S, 2011. "The effect of subsidies on the performance and sustainability of microfinance institutions in sub Saharan Africa," Research Theses 157512, Collaborative Masters Program in Agricultural and Applied Economics.
    14. Patrick-Hervé Mbouombouo Mfossa & Gregory Mvogo & Martin Ndzana, 2013. "Performance Sociale Versus Performance Financière : Quel Objectif Pour Les Microfinances Camerounaises ?," Post-Print hal-01215552, HAL.
    15. Karel Janda & Van Quang Tran & Pavel Zetek, 2015. "Faktory ovlivňující zapojení žen v mikrofinancích
      [The Factors Influencing the Participation of Women in Microfinance]
      ," Politická ekonomie, University of Economics, Prague, vol. 2015(3), pages 363-381.
    16. Janda, Karel & Van Tran, Quang & Zetek, Pavel, 2014. "Influence of External Funding on Microfinance Performance," MPRA Paper 58170, University Library of Munich, Germany.
    17. Simon Cornée & Gervais Thenet, 2015. "Efficience des institutions de microfinance en Bolivie et au Pérou : une approche Data Envelopment Analysis en deux étapes," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201516, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    18. Janda, Karel & Van Tran, Quang & Zetek, Pavel, 2014. "Vybrané faktory ovlivňující zapojení žen v mikrofinancích
      [The Selected Factors Influencing the Participation of Women in Microfinance]
      ," MPRA Paper 59109, University Library of Munich, Germany.
    19. Inoue, Takeshi & Hamori, Shigeyuki, 2011. "Financial permeation as a role of microfinance : has microfinance actually been helpful to the poor?," IDE Discussion Papers 299, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    20. Marcella Corsi & Marina De Angelis & Pierluigi Montalbano, 2013. "The Gender Impact of Microfinance: The Case of Wekembe in Uganda," Working Papers CEB 13-045, ULB -- Universite Libre de Bruxelles.
    21. repec:rss:jnljfe:v1i4p5 is not listed on IDEAS
    22. Aree Cheamuangphan & Aree Wiboonpongse & Songsak Sriboonchitta, 2012. "Factors enhancing efficiency of microfinance performance in agricultural communities of upper Northern Thailand," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(4), pages 1-20, December.

    More about this item


    microfinance; financial sector development; aid; developing world;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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