Gender, operational efficiency, population density and the performance of mirofinancing institutions

Abstract

PurposeThe purpose of this research is to investigate the effect of operational efficiency, gender of the borrowers and the population density on the performance of microfinancing institutions that play a significant role in alleviating poverty in developing countries.Design/methodology/approachA model showing the relationships among the variables is first proposed based on the hypotheses developed in the literature review. Then the model is tested with empirical data using multiple regression and path analysis. Data used in the analysis relate to 234 microfinancing institutions across 63 countries.FindingsThe study finds that operational efficiency and gender of the borrowers have a direct impact on the performance of microfinancing institutions. Although population density does not have a direct impact on performance it has an indirect effect through operational efficiency and gender of the borrowers.Practical implicationsThe findings of this study reveal to the policy makers and managers of microfinancing institutions the importance of focussing on the three factors analysed (operational efficiency, gender of the borrowers and population density) to reduce poverty.Originality/valueThe study enhances the current knowledge in the literature relating to microfinancing. The findings help to improve the performance of microfinancing institutions resulting in efficient and effective utilisation of hundreds of millions of donor funds originating from tax payers in developed countries.

Gender and other repayment determinants of microfinancing in Indonesia and Sri Lanka

“…However, two recent global studies have found that women borrowers are better compared to men. Nanayakkara and Mia (2012) analysed 234 MFIs across 63 countries and found that the percentage of female borrowers has a significant effect on the performance of MFIs. From a sample of 350 MFIs located in 70 countries, D 'Espallier et al (2011) found that the repayment record of females is better than that of their male counterparts after controlling for a number of other variables.…”

A review of microfinance banks effects on smallholder development in Nigeria

“…Further studies are also required in each of the clusters considering that some terms relevant to microfinance banking in other countries such as 'gender' (Nanayakkara, 2012) were missing from the selected literature. New studies must assess issues besides these three main thematic areas identified in the literature and comprehensively understand the causal linkages between the terms in each cluster.…”