Funding microfinance under asymmetric information

Ghosh, Suman; Tassel, Eric Van

doi:10.1016/j.jdeveco.2012.09.005

Cited by 31 publications

(21 citation statements)

References 13 publications

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“…MFIs face huge demand for their services, in particular loans. To service the high demand for microloans we contend that MFIs need to shift their funding focus from donors to the capital markets (Gosh & Van Tassel, ; Tchuigoua et al, ). It is therefore relevant to search for factors influencing the MFIs’ ability to attract debt.…”

Section: Discussionmentioning

confidence: 99%

“…It is likely that CEOs of MFIs follow a pecking order because retained profits, subsidies, and donations do not match the huge demand of microcredits by low‐income families (Gosh & Van Tassel, ; Tchuigoua, ). Experienced CEOs may to an even larger extent follow a pecking order because longevity of tenure in the position increases CEOs’ discretional power in general (Berger et al, ), as well as their influence on firms’ financing (Hambrick & Fukutomi, ).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…However, these forms of organizations soon started to face funding constraints (Fehr & Hishigsuren, ). Access to donations and subsidies did not match the huge demand for microcredits by low‐income families (Ashta & Hudon, ; Gosh & Van Tassel, ).…”

Section: Introductionmentioning

confidence: 99%

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Capital structure and CEO tenure in microfinance institutions

2018

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here is a osi e associa on between O tenure and the debt ro or on o micro nance ins tu ons. icro nance ins tu ons need im ro ed access to debt ca ital to co er a hu e and increasin world demand or micro nance ser ices. ore e erienced Os may be more ali ned with the micro nance ins tu on s mission, and they may ha e a be er understandin o the business model o micro nance. oreo er, ca ital ro iders may re uire a ro en trac record within the ins tu on to su ly undin . | While much research e orts ha e been ut into understandin whether oor eo le bene t rom accessin nancial ser ices, less 3 School o usiness and Law, ni ersity o der, orway rr s c Lei tle eisland, School o usiness and Law, ni ersity o der, Ser ice o 422, 4 04 ris ansand, orway. mail: lei .a.beisland uia.no * J. .L. classi ca on codes: 21, 32, 12 Strategic Change. 2018;27(4):329-337.wileyonlinelibrary.com/journal/jsc

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Section: Discussionmentioning

confidence: 99%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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Capital structure and CEO tenure in microfinance institutions

2018

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“…Isso pode levar ao aumento dos custos de monitoramento e controle dos tomadores, o que em alguns casos torna os custos inacessíveis ao público dos programas de microcrédito (Ghosh & Van Tassel, 2013 (Neri, 2008); c) alguns ou todos os tomadores recebem uma quantidade de recursos inferior à sua demanda (Jaffee & Russell, 1976); d) alguns potenciais tomadores não solicitam empréstimos por conhecerem os custos de transação e a pouca probabilidade de obterem êxito (Bester, 1985).…”

Section: Assimetria De Informação Restrição De Crédito E Colaterais unclassified

Microcrédito e Microempreendedor: O Caso do Crediamigo na Região do Vale do Jequitinhonha – Minas Gerais

Vieira

Barbosa

2017

Adm. Púb. e Gest. Social

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Resumo: O microcrédito tem despertado o interesse de governantes devido a sua suposta capacidade de combater a pobreza e de criar oportunidades de desenvolvimento econômico em áreas tradicionalmente pouco favorecidas economicamente. Todavia pouco se tem estudado a respeito dos microempreendimentos que utilizam este tipo de financiamento. Este trabalho busca esclarecer como o microcrédito influencia a promoção do empreendedorismo no Vale do Jequitinhonha. Para explicitar este fenômeno, foi realizado um survey com microempreendedores que foram atendidos pelo Crediamigo. Os dados coletados foram agrupados por meio da cluster analysis. A análise dos dados permitiu constatar que o microcrédito exerce uma influência positiva na lucratividade e na geração de fluxo de caixa nos negócios, uma vez que permite a formação de capital de giro em condições melhores do que aquelas que possuíam anteriormente. Porém, a influência positiva não foi encontrada na geração de novos empregos, já que grande parcela é composta por trabalhadores individuais. Palavras-chave: Microcrédito, Vale do Jequitinhonha, Microempreendedores, Cluster Analysis Abstract: Microcredit has awakened the interest of rulers due to its supposed capacity to fight poverty and create economic development opportunities in areas traditionally less-favored economically. However, little has been studied about the microenterprises that utilize this type of financing. This paper seeks to clarify how microcredit influences the promotion of entrepreneurship in Vale do Jequitinhonha. In order to explain this phenomenon, a survey with micro entrepreneurs that were served by Crediamigo was conducted. The collected data was grouped by means of cluster analysis. The data analysis made it possible to verify that microcredit has a positive influence upon the profitability and cash flow emanation in businesses, once it provides the means for the generation of working capital in better conditions. Still, this positive influence relation was not observed when it came to job creation, since a big part of it is composed of individual workers.

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“…Due to their historical background, serving the underprivileged, MFIs are largely reliant on donor's funds, however, these funds are highly volatile and inadequate leading to financial unsustainability which is likely to erode the quality of future services. Thus, MFIs must strive for financial sustainability to meet their goals (Ghosh & Van Tassel, 2013;Helms, 2006). This can be achieved through commercialization and competition of microlending services focusing on financial sustainability (Abate et al, 2013).…”

Section: Introductionmentioning

confidence: 99%

Influence of Financial Leverage on Financial Sustainability. A Case of a Microfinance Institution in Kenya

Bitok¹,

Cheboi²,

Kemboi³

2019

TR1001

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Microfinance institution plays a crucial role in economic development and financial inclusion. Financial sustainability is the key dimension to microfinance institutions growth. Which further indicate the importance of which Financial sustainability is. Therefore, the present study investigated the effect of financial leverage on MFI financial sustainability. The specific objective was to establish the effect of financial leverage on the financial sustainability of MFIs. The study was guided by agency theory and lifecycle theory. The study adopted an explanatory research design where a panel approach was used as well as the positivist paradigm. The study adopted the census approach method. Panel data was drawn from 30 MFIs for a period between 2010 and 2018 from mix market database using the data collection schedule. The study used both descriptive and inferential statistics to analyze data with the help of STATA software. Fixed effect model based on Hausman test (X 2 = 45.41, p= 0.000 ≤ 0.05). Based on the findings of the study financial leverage ( 1 0.27, 0.001 , the study had a positive and significant effect on the financial sustainability of MFIs. The study recommended MFIs managers to engage in the prudent use of financial leverage so that they enhance their overall profitability and boost investor confidence in their strategic decision-making resulting in financial sustainability. The results have an implication to business managers and policymakers given the vital role in service delivery and the challenges hindering the sector from the realization of financial sustainability in the economy.

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Funding microfinance under asymmetric information

Cited by 31 publications

References 13 publications

Capital structure and CEO tenure in microfinance institutions

Capital structure and CEO tenure in microfinance institutions

Microcrédito e Microempreendedor: O Caso do Crediamigo na Região do Vale do Jequitinhonha – Minas Gerais

Influence of Financial Leverage on Financial Sustainability. A Case of a Microfinance Institution in Kenya

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