Microfinance Institution Performance: Does the Macro-economy matter?

Awaworyi Churchill, S, Danso, J and Nyatefe, E 2018, 'Microfinance Institution Performance: Does the Macro-economy matter?', Economic Papers, vol. 37, no. 4, pp. 429-442.

Document type: Journal Article
Collection: Journal Articles

Title Microfinance Institution Performance: Does the Macro-economy matter?
Author(s) Awaworyi Churchill, S
Danso, J
Nyatefe, E
Year 2018
Journal name Economic Papers
Volume number 37
Issue number 4
Start page 429
End page 442
Total pages 14
Publisher Wiley-Blackwell Publishing Asia
Abstract The performance of Microfinance Institutions (MFIs) has been compared at various levels for the purpose of replications and policy formulations. However, the potential effects of the macroeconomy on MFI performance are often not considered. We propose that understanding the possible effects of country-level factors on MFI performance can help provide a more accurate evaluation and explain where microfinance fits in the development process. Based on data collected on 1544 MFIs, merged with country-level macroeconomic and macro-institutional data, we examine the effects of the macroeconomy on MFI performance. The results suggest that high economic growth is associated with better MFI performance. However, other modes of economic development, including wage employment opportunities, appear to impede MFI financial performance.
Subject Applied Economics not elsewhere classified
Keyword(s) Microfinance
Economic growth
Financial performance
DOI - identifier 10.1111/1759-3441.12233
Copyright notice © 2018 The Economic Society of Australia
ISSN 1759-3441
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