A meta-analysis examining the nature of trade-offs in microfinance

Reichert, Patrick

doi:10.1080/13600818.2018.1427223

Cited by 53 publications

(43 citation statements)

References 66 publications

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“…Piot-Lepetit and Nzongang (2014) find evidence for the existence of a trade-off, but only for a minority of MFIs in Cameroon. Reichert (2018) performs a meta-analysis of the literature on the trade-off between financial and social performance. He synthesizes 623 regression outcomes.…”

Section: Trade-off Between Financial and Social Performancementioning

confidence: 99%

Determinants of the Performance of Microfinance Institutions: A Systematic Review

Hermes

Hudon

2018

Journal of Economic Surveys

106

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Microfinance institutions (MFIs) generally aim at improving the access of the poor to financial services while at the same time being financially sustainable. But what do we know about how MFIs reach and combine these two goals? We carry out a systematic review of close to 170 papers discussing the determinants of the financial and social performance of MFIs. The review shows that the most important determinants addressed in the literature are MFI characteristics (size, age and type of organization), their funding sources, the quality of organizational governance and the MFIs’ external context such as macro‐economic, institutional and political conditions. The evidence on these issues is rather mixed. Moreover, the direction of the relationship between these drivers and MFI performance depends on the context, particularly the country‐specific context. Finally, there is a lack of consensus in the literature on the measurement of financial and social performance. Due to the complexity of the concept, we argue that social performance should only be assessed by using a multidimensional perspective. This can be done either by applying recent and holistic social performance measures such as the SPI4, or at least by using a combination of proxies, such as outreach, gender and rural measures.

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Section: Trade-off Between Financial and Social Performancementioning

confidence: 99%

Determinants of the Performance of Microfinance Institutions: A Systematic Review

Hermes

Hudon

2018

Journal of Economic Surveys

106

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“…Outreach tells how well the social performance of MFPs is in the provision of its services to the poor and it can be proxied through the quantity and kinds of users of MFPs' services (Meyer, 2019). It is the scale and level of poverty being accessed for the provision of financial services (Reichert, 2018). The "poverty approach" lays stress on deepening the outreach, whereas, widening the breadth of outreach is the target for MFPs under the "sustainability approach" Schreiner (2002).…”

Section: Explanatory Variablesmentioning

confidence: 99%

The Impact of Social Outreach on the Financial Performance of Microfinance Providers in Pakistan

2019

EJBM

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Microfinance, the tool for poverty alleviation had gone through a paradigm shift as a result of the wave of commercialization of microfinance providers. Increased focus to financial goals and the dreaded trade-off from the pursuance of social outreach goals could force microfinance service providers (MFPs) to the mission drift. To solve the entangled puzzle of mutuality between the social outreach and financial performance of MFPs in Pakistan, this study empirically analyses the impact of outreach on financial performance of MFPs in Pakistan by using a sample of 38 MFPs for the period of 1998-2014. Results suggest that there is significant and positive association between depth of outreach and financial performance. The empirical evidence signaled no trade-off between depth of outreach and financial performance. Results showed the achievement of dual mission for MFPs is possible, as the depth of outreach had a significant positive effect on the financial performance of MFPs in the context of Pakistan. Findings remain consistent by using alternative proxies of financial performance.

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“…The rapid commercialization of the microfinance environment from a nonprofit orientation to a more formal, profit‐oriented business‐like has been challenging for many MFIs (Ly ; Reichert ). As MFIs attain a new legal status, and regulations push them towards a banking‐like identity, the discourse on social goals risks being consigned to the margins.…”

Section: Discussionmentioning

confidence: 99%

Microfinance Regulation and Social Sustainability of Microfinance Institutions: The Case of Nigeria and Zambia

Siwale

Okoye

2017

Ann Public Coop Econ

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This study examines the effect of regulations on microfinance institutions in Nigeria and Zambia by focusing on the post-regulation experiences and reflections of the microfinance institutions (MFIs) and their regulators. Based on in-depthinterviews with the Central Banks as regulators, MFI managers, practitioners and apex microfinance associations, the study finds that regulations in both countries have managed to professionalize the sector, but their effectiveness in augmenting the centrality of social goals to microfinance and MFIs remains doubtful. The poorly designed regulations are not only undermining social goals but also sending wrong signals to would be social investors, with implications for the social image of the industry. The study further finds that regulations have neither speeded the emergence of sustainable MFIs (especially in Zambia) nor accelerated the sectors' outreach to the poor and the financially excluded. Additionally, considerable levels of political interference and poor regulation have led to unintended consequences to the sector, further frustrating the ultimate goal of extending financial services to the poor. These findings have policy and practical implications for how microfinance engages with the regulatory logic and continues to serve those at the bottom of the pyramid.

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A meta-analysis examining the nature of trade-offs in microfinance

Cited by 53 publications

References 66 publications

Determinants of the Performance of Microfinance Institutions: A Systematic Review

Determinants of the Performance of Microfinance Institutions: A Systematic Review

The Impact of Social Outreach on the Financial Performance of Microfinance Providers in Pakistan

Microfinance Regulation and Social Sustainability of Microfinance Institutions: The Case of Nigeria and Zambia

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