Interest rate caps may generate adverse effects for microfinance institutions and their clients. Interest rate caps imposed in competitive and highly saturated markets may favor the commercial mindset of microfinance institutions to the detriment of social outreach. In Cambodia, the recent interest rate cap has likely not contributed to protecting the poor, slowing down the market, or reducing the risk of over‐indebtedness. Policymakers and regulators should consider market conditions, especially the degree of competition when making regulatory decisions that may substantially affect the microfinance industry.
A close relationship between microfinance loan officers and their clients is essential to avoid the phenomenon of client dropout. Client retention has been identified as a critical factor for both the social performance and the financial sustainability of microfinance institutions. Relationship lending in microfinance decreases the probability of clients dropping out, showing the importance of close contacts between loan officers and their clients. We recommend that microfinance practitioners avoid the rotation of loan officers through different branches when the risk of fraud from loan officers is low.
Even in double‐bottom‐line‐microfinance institutions, loan officers are not all prosocially motivated but rather are motivated by working conditions and promotions, highlighting the complexity of human resource management in hybrid organizations.
This paper examines the effect of the gender combination of client-loan officer pairs on loan repayment in an Ecuadorian microfinance institution. We show that among the four possible clientloan officer gender pairs i.e., female client-female loan officer, female client-male loan officer, male client-male loan officer and male client-female loan officer, the most favorable pairs in terms of repayment are those with female loan officers whereas the least favorable are those with male loan officers. We also show that repayment is even further enhanced for all client-loan officer pairs when the client's previous loan officer was a woman. Our findings point to relational differences between male and female loan officers when interacting with microfinance clients, which is also highlighted by our qualitative insights from the field.
This paper offers a detailed and systemic representation of the process of organizational identification in social enterprises, and a better understanding of how individuals position themselves in these organizations. We highlight that identification in social enterprises is the result of the interplay between the multiple identities of the individuals who take part in coalitions defending different institutional logics. Identification will depend on whether or not it is easy for the individual to find a coalition that corresponds to him or her, and on whether or not the ideas of this coalition are dominant. The relative size of the various coalitions among the staff and the way they evolve will have a clear impact on what the dominant logic of the social enterprise will be.
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