The Influence of CSR Practices on the Financial Performance of Microfinance Institutions in Togo

Abstract

Microfinance pursues a dual objective: reduce poverty (social performance) and ensure lasting profitability (financial performance). However, beyond these two performances, microfinance institutions (MFIs) have a social responsibility (CSR) towards their stakeholders. The main objective of this article is to measure the influence of the CSR practices of Togolese MFIs on their financial performance. The analysis is conducted over a sample of 60 Togolese MFIs, using the principal component analysis and generalized least squares techniques. The results show that CSR through the dimensions customer, employees and community positively and significantly impact on the financial performance of MFIs when measured by ROA, while the environment dimension has a negative significant influence.

Agricultural credit supply and the performance of microfinance institutions in southern Togo

“…Several studies have looked at the determinants of the financial performance of microfinance institutions (Adongo and Stork 2005;Tehulu 2013;Ibrahim 2015;Bui 2017;Kanyenda 2019;Gadedjisso-Tossou et al 2021), etc. According to Adongo and Stork (2005) the viability of the evaluated microfinance institutions is provided by the support funds from donors.…”

“…the number of active borrowers and the average loan size, are the determinants of the sustainability of microfinance institutions in Togo. Gadedjisso-Tossou et al (2021), also mentioned social responsibility (CSR) as a relevant factor for the sustainability of microfiance institutions. Few studies have examined the performance of microfinance institutions concerning the agricultural credit supplies.…”