Microfinance Performance and Informal Institutions : A Cross-country Analysis
Year: 2015
Type: preprint
Abstract: This paper investigates the relationship between the extent to which informal institutions are developed at the country-level and the financial and social performance of MFIs, using data from institutions active in 100 countries. Based on the theoretical literature discussing the economic role of informal institutions such as trust, beliefs, norms and values we hypothesize that microfinance is more successful, both in terms of their financial and social aims, in countries with stronger informal institutions. We test this hypothesis using various direct and indirect measures of informal institutions and link them to measures of financial and social performance of MFIs. Our empirical results are generally supportive to our hypothesis.
Authors: C.L.M. Hermes, Luminita Postelnicu
Institution: Université Libre de Bruxelles
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1926199010