Microfinance Institutions (MFIs) are a special case in the financial world. They have a double financial and social role and need to be efficient at both. In this paper we try to measure the efficiency of MFIs in relation to financial and social outputs using Data Envelopment Analysis. For the analysis of financial efficiency we rely on existing literature for traditional financial institutions. To this we have added two indicators of social performance: impact on women, and a poverty reach index. A series of hypotheses on MFIs have been entertained, that concern the relationship between social and financial efficiency, and the relationship between efficiency and other indicators, such as profitability. Other aspects studied are the relation between social efficiency and type of institution -Non-Governmental Organisation (NGO), non-NGO-, and the importance of geographical region of activity. The results reveal the importance of social efficiency assessment. JEL Classification: G290
This paper studies P2P lending and the factors explaining loan default. This is an important issue because in P2P lending individual investors bear the credit risk, instead of financial institutions, which are experts in dealing with this risk. P2P lenders suffer a severe problem of information asymmetry, because they are at a disadvantage facing the borrower. For this reason, P2P lending sites provide potential lenders with information about borrowers and their loan purpose. They also assign a grade to each loan. The empirical study is based on loans’ data collected from Lending Club (N = 24,449) from 2008 to 2014 that are first analyzed by using univariate means tests and survival analysis. Factors explaining default are loan purpose, annual income, current housing situation, credit history and indebtedness. Secondly, a logistic regression model is developed to predict defaults. The grade assigned by the P2P lending site is the most predictive factor of default, but the accuracy of the model is improved by adding other information, especially the borrower’s debt level.
Microfinance Institutions (MFIs) are special financial institutions. They have both a social nature and a for-profit nature. Their performance has been traditionally measured by means of financial ratios. The paper uses a Data Envelopment Analysis (DEA) approach to efficiency to show that ratio analysis does not capture DEA efficiency.Special care is taken in the specification of the DEA model. We take a methodological approach based on multivariate analysis. We rank DEA efficiencies under different models and specifications; e.g., particular sets of inputs and outputs. This serves to explore what is behind a DEA score.The results show that we can explain MFIs efficiency by means of four principal components of efficiency, and this way we are able to understand differences between DEA scores. It is shown that there are country effects on efficiency; and effects that depend on Non-governmental Organization (NGO)/non-NGO status of the MFI.
In the last 20 years, microfinance has moved from a promise to reality, although with ups and downs. This paper reviews 1,874 papers published from 1997 to 2017 to perform a scientometric analysis of the microfinance field. The literature review is based on bibliometric data: keyword co-occurrence networks and citation networks were exploited for knowledge mapping. Data analysis shows the two research traditions: papers focusing on clients (welfarists) and papers focusing on microfinance entities themselves (institutionalists). Institutionalism, which had little presence in the early research in microfinance, now exhibits great strength. A chronological analysis reveals the evolution of the topics most interesting to researchers: the first stage described the innovations of the microcredit practices and their impact; the second and very expansive stage in which microfinance institutions' peculiarities were analyzed; and nowadays the sector is mature but with negative aspects arising, such as mission drift. The keywords analysis discovers emerging research topics, shows the use of sophisticated techniques, and recognizes an emerging trend of the sector: achieving financial inclusion. AbstractIn the last 20 years, microfinance has moved from a promise to reality, although with ups and downs. This paper reviews 1,874 papers published from 1997 to 2017 to perform a scientometric analysis of the microfinance field. The literature review is based on bibliometric data: keyword cooccurrence networks and citation networks were exploited for knowledge mapping. Data analysis shows the two research traditions: papers focusing on clients (welfarists) and papers focusing on microfinance entities themselves (institutionalists). Institutionalism, which had little presence in the early research in microfinance, now exhibits great strength. A chronological analysis reveals the evolution of the topics most interesting to researchers: the first stage described the innovations of the microcredit practices and their impact; the second and very expansive stage in which microfinance institutions' peculiarities were analyzed; and nowadays the sector is mature but with negative aspects arising, such as mission drift.The keywords analysis discovers emerging research topics, shows the use of sophisticated techniques, and recognizes an emerging trend of the sector: achieving financial inclusion.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.