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Green Microfinance. Characteristics of microfinance institutions involved in environmental management

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  • Marion Allet
  • Marek Hudon

Abstract

In recent years, development practice has seen that microfinance institutions (MFIs), beyond their financial and social objectives, start considering their environmental bottom line. Yet, little is known on the characteristics of institutions involved in environmental management. For the first time, this paper empirically identifies the characteristics of these ‘green’ MFIs on a sample of 160 microfinance institutions worldwide. Basing our analysis on various econometric tests, we find that larger MFIs and MFIs registered as banks tend to perform better in environmental policy and environmental risk assessment. Furthermore, more mature MFIs tend to have a better environmental performance, in particular in the provision of green microcredit and environmental non-financial services. On the other hand, financial performance is not significantly related to environmental performance, suggesting that ‘green’ MFIs are not more or less profitable than other microfinance institutions.

Suggested Citation

  • Marion Allet & Marek Hudon, 2013. "Green Microfinance. Characteristics of microfinance institutions involved in environmental management," Working Papers CEB 13-005, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:2013/138434
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    More about this item

    Keywords

    Microfinance; Environment; Microcredit; Corporate Social Responsibility; Size; Financial Performance;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D20 - Microeconomics - - Production and Organizations - - - General
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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