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Commercialization and Mission Drift — A Cross Country Evidence on Transformation of Microfinance Industry

Year: 2013

Type: article

Abstract: The present study examine the most important issue faced by microfinance institutions around the world in this present era that is the commercialization trend and drifting size.This study will analyze whether the commercialization from their primary function of serving poor class of the society to moving towards better off customer in order to satisfy their urge of financial benefits.This study is using average loan size as proxy of mission drift with operational self sufficiency as profit measure, productivity as cost measure and repayment risk as independent variables in the study .The study also accommodate age ,size as control variables .Data has been taken from all the six regions of the world from 72 countries for the years 2003 to 2009.The econometric evidence using random effect estimation technique reveals that profitability and risk are positively related with average loan size where as cost is inverse relation with size of loan .The impact of age and size varies from region to region.

Source: International Journal of Trade Economics and Finance

DOI: 10.7763/ijtef.2014.v5.353

Authors: Afsheen Abrar, Attiya Y. Javaid

Institutions: Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology, Pakistan Institute of Development Economics

Language: English

Topic: Microfinance and Financial Inclusion

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

OpenAlex ID: W2321963449