Operational self-sufficiency of select NBFC-MFIS of Andhra Pradesh

Esampally, Chandraiah; Joshi, Manoj K.

doi:10.5958/2321-2012.2016.00009.9

Cited by 4 publications

(5 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Hypothesis 3 illustrates the relationship between OSS and Financial sufficiency in the Microfinance sector of Pakistan. OSS was strongly positively associated with Financial sustainability in many prior studies both in developed and developing economies (Adongo and Stork, 2006;Rai et al, 2010;Schäfer and Fukasawa, 2011;Rai and Rai, 2012;Beg, 2016;Esampally and Joshi, 2016;Naz et al, 2019). The current study results are consistent with prior studies except for Cochran and Wood (1984), where a weak correlation was found between CSR-FP.…”

Section: Discussionsupporting

confidence: 90%

“…Therefore, measurement of OSS (revenues minus operational expenses) is a better approach than FSS (Rai et al, 2010;Schäfer and Fukasawa, 2011;Rai and Rai, 2012). Operational self-sufficiency is expressed in percentage and shows whether MFI covers operating cost, financial cost, and loan losses, and is achieved if it is more than 100 percent (Esampally and Joshi, 2016). OSS can be found by reducing cost or increasing revenues (Adongo and Stork, 2006;Schäfer and Fukasawa, 2011;Beg, 2016).…”

Section: Operational Self-sustainabilitymentioning

confidence: 99%

“…The financial sustainability in MFIs can be obtained through the gaining of operational self-sufficiency in the long term, which reduces cost and increases efficiency (Adongo and Stork, 2006;Balkenhol, 2007;Rai et al, 2010;Rai and Rai, 2012;Hamad and Duman, 2013;Velnamby and Alagathurai, 2014;Balagobei, 2016;Beg, 2016;Esampally and Joshi, 2016;Lensink et al, 2018). Khan and Sulaiman (2015) reported the inefficiency of MFIs in operating cost and loan officers and optimal use of financial assets.…”

Section: Operational Self-sustainabilitymentioning

confidence: 99%

“…Corporate Social Responsibility was directly tested with Financial performance in many prior studies (Adongo and Stork, 2006;Balkenhol, 2007;Rai et al, 2010;Rai and Rai, 2012;Hamad and Duman, 2013;Velnamby and Alagathurai, 2014;Balagobei, 2016;Beg, 2016;Esampally and Joshi, 2016;Lensink et al, 2018) but operational self-sustainability is the critical variable in the Microfinance sector. OSS's role cannot be ignored as the literature depicts that an MFI is financially viable if its operational cost is less than its operating income, whereas, CSR increases the operational expenses and decreases the profitability of the firm.…”

Section: Operational Self-sustainabilitymentioning

confidence: 99%

See 3 more Smart Citations

Financial Sustainability and Corporate Social Responsibility Under Mediating Effect of Operational Self-Sustainability

2020

View full text Add to dashboard Cite

Operational and financial sustainability have, over time, remained as issues in the microfinance industry. The microfinance industry is struggling to gain self-sufficiency in Pakistan due to non-performing loans and operating costs. Simultaneously, deliberation on corporate social responsibility (CSR) is also considered in academic literature and organizational practices. However, studies on CSR and financial performance in the microfinance sector are scarce, especially in Pakistan. CSR will develop customer attraction and loyalty, employee attraction, motivation and commitment, MFIs' reputation and access to capital, and eventually build financial performance. Interviews were conducted with branch managers of microfinance institutions to test previous questionnaires. A self-administered survey was conducted to collect data from the managers of the microfinance banks operating in Punjab. Descriptive and inferential statistics were performed to answer research questions using Smart PLS. Most of the microfinance institutions believe in social responsibilities but lacks fund allocation and approval from higher management, and results are in line with prior studies. These empirical findings lead to the perception that CSR is not a barrier performance in microfinance banks as they have access to capital. The results indicated a strong positive correlation between CSR and the financial performance of the MFIs. CSR also positively correlates with customer retention, employees' motivation and attraction, and business reputation. CSR was associated with access to capital but was found to be weak. The research also narrated the limitation and practical implications of the study. The study also discusses further research directions.

show abstract

Section: Discussionsupporting

confidence: 90%

Section: Operational Self-sustainabilitymentioning

confidence: 99%

Section: Operational Self-sustainabilitymentioning

confidence: 99%

Section: Operational Self-sustainabilitymentioning

confidence: 99%

See 2 more Smart Citations

Financial Sustainability and Corporate Social Responsibility Under Mediating Effect of Operational Self-Sustainability

2020

View full text Add to dashboard Cite

show abstract

“…The study uses two conventional measures of MFI financial performance: operational self‐sufficiency (OSS) and profit margin (PM). OSS measures the ability of operations of an MFI to absorb its total expenses, made up of operational expenses, financial expenses and loan loss provisions through the revenues it generates (Chandraiah & Kumar, 2016). OSS = Operating revenue / (Financial expenses + Loan – Loss provision expense + Operating expense).…”

Section: Methodsmentioning

confidence: 99%

Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?

Sarpong‐Danquah

Adusei

Frimpong

2022

Ann Public Coop Econ

View full text Add to dashboard Cite

The impact of board gender diversity on the financial performance of firms is not known. This is because empirical investigations have yielded inconclusive outcomes. This study engages data from 408 microfinance institutions (MFIs) covering the period 2010-2018 from the six microfinance regions to investigate this impact using the Least Squares Dummy Variable (LSDV) and the System Generalized Method of Moments (SYS-GMM) estimation techniques. The study also explores whether judicial efficiency exerts any significant effect on the board gender diversity-financial performance nexus. The study observes that board gender diversity exhibits a strong negative effect on the financial performance of MFIs. The study also observes that the effect of board gender diversity on the financial performance of MFIs escalates in the presence of judicial inefficiency. The study, therefore, unveils the judicial system as a channel through which gender diversity drives the financial performance of MFIs negatively.

show abstract

Understanding Relevance of Business Environment for Financial Performance: The Case of Asian Non-Banking Microfinance Institutions

Farooq

Ahmad

Liaqat

et al. 2022

Vision

View full text Add to dashboard Cite

Microfinance aims at providing productive loans to deprived segments of society that helps in poverty eradication. Existing studies ignore some essential factors of business environment, which can influence the performance of microfinance institutions. We have collected data from the Doing Business project of the World Bank and audited financial statements of 52 Asian non-banking microfinance institutions for the period of 2012–2016. This study has employed system method of moments (GMM) technique with xtabond2 command, and the findings of analyses reveal the significant impact of different business environmental factors such as getting credit, protecting minor investors and paying taxes on financial performance of selected institutions. These findings recommend that practitioners need to pay particular attention to the formulation of such policies that can help these institutions in coping better with their external business environment.

show abstract

Operational self-sufficiency of select NBFC-MFIS of Andhra Pradesh

Cited by 4 publications

References 0 publications

Financial Sustainability and Corporate Social Responsibility Under Mediating Effect of Operational Self-Sustainability

Financial Sustainability and Corporate Social Responsibility Under Mediating Effect of Operational Self-Sustainability

Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?

Understanding Relevance of Business Environment for Financial Performance: The Case of Asian Non-Banking Microfinance Institutions

Contact Info

Product

Resources

About