Competition, performance and portfolio quality in microfinance markets

Ashim Kumar Kar, Ranjula Bali Swain

    Tutkimustuotos: Artikkeli kirjassa/raportissa/konferenssijulkaisussaKirjan luku tai artikkeliTieteellinen

    Kuvaus

    In recent years growing competition in the microfinance industry has been censured for multiple borrowing, default crises, high interest rates and coercive recovery of loans. Using the Boone indicator as a measure for competition, our paper investigates the impact of competition on microfinance institutions’ (MFIs) outreach, financial performance and quality of loan portfolio. We deal with the potential endogeneity issues by employing the instrumental variable approach using the generalized methods of moments (GMM) estimation technique. Analysing the Microfinance Information Exchange data our empirical results show that increased competition in microfinance sector leads to a larger average loans and a decrease in the financial self-sustainability. The data also supports the view that increased competition in the microfinance industry leads to a decline in the loan portfolio quality.
    Alkuperäiskielienglanti
    OtsikkoCompetition, performance and portfolio quality in microfinance markets
    Sivumäärä33
    JulkaisupaikkaUppsala
    KustantajaUppsala University
    Julkaisupäivä2014
    TilaJulkaistu - 2014
    OKM-julkaisutyyppiB2 Kirjan tai muun kokoomateoksen osa

    Julkaisusarja

    NimiWorking Paper Series
    KustantajaUppsala University
    Numero8
    Vuosikerta2014
    ISSN (painettu)1653-6975

    Tieteenalat

    • 511 Kansantaloustiede

    Lainaa tätä

    Kar, A. K., & Bali Swain, R. (2014). Competition, performance and portfolio quality in microfinance markets. teoksessa Competition, performance and portfolio quality in microfinance markets (Working Paper Series; Vuosikerta 2014, Nro 8). Uppsala: Uppsala University.
    Kar, Ashim Kumar ; Bali Swain, Ranjula. / Competition, performance and portfolio quality in microfinance markets. Competition, performance and portfolio quality in microfinance markets. Uppsala : Uppsala University, 2014. (Working Paper Series; 8).
    @inbook{6f68676d0f1447a695a855dd16ccab82,
    title = "Competition, performance and portfolio quality in microfinance markets",
    abstract = "In recent years growing competition in the microfinance industry has been censured for multiple borrowing, default crises, high interest rates and coercive recovery of loans. Using the Boone indicator as a measure for competition, our paper investigates the impact of competition on microfinance institutions’ (MFIs) outreach, financial performance and quality of loan portfolio. We deal with the potential endogeneity issues by employing the instrumental variable approach using the generalized methods of moments (GMM) estimation technique. Analysing the Microfinance Information Exchange data our empirical results show that increased competition in microfinance sector leads to a larger average loans and a decrease in the financial self-sustainability. The data also supports the view that increased competition in the microfinance industry leads to a decline in the loan portfolio quality.",
    keywords = "511 Economics, microfinance institutions, competition, outreach, financial performance, capitalization, panel data IV estimation.",
    author = "Kar, {Ashim Kumar} and {Bali Swain}, Ranjula",
    year = "2014",
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    publisher = "Uppsala University",
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    booktitle = "Competition, performance and portfolio quality in microfinance markets",
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    Kar, AK & Bali Swain, R 2014, Competition, performance and portfolio quality in microfinance markets. julkaisussa Competition, performance and portfolio quality in microfinance markets. Working Paper Series, Nro 8, Vuosikerta 2014, Uppsala University, Uppsala.

    Competition, performance and portfolio quality in microfinance markets. / Kar, Ashim Kumar; Bali Swain, Ranjula.

    Competition, performance and portfolio quality in microfinance markets. Uppsala : Uppsala University, 2014. (Working Paper Series; Vuosikerta 2014, Nro 8).

    Tutkimustuotos: Artikkeli kirjassa/raportissa/konferenssijulkaisussaKirjan luku tai artikkeliTieteellinen

    TY - CHAP

    T1 - Competition, performance and portfolio quality in microfinance markets

    AU - Kar, Ashim Kumar

    AU - Bali Swain, Ranjula

    PY - 2014

    Y1 - 2014

    N2 - In recent years growing competition in the microfinance industry has been censured for multiple borrowing, default crises, high interest rates and coercive recovery of loans. Using the Boone indicator as a measure for competition, our paper investigates the impact of competition on microfinance institutions’ (MFIs) outreach, financial performance and quality of loan portfolio. We deal with the potential endogeneity issues by employing the instrumental variable approach using the generalized methods of moments (GMM) estimation technique. Analysing the Microfinance Information Exchange data our empirical results show that increased competition in microfinance sector leads to a larger average loans and a decrease in the financial self-sustainability. The data also supports the view that increased competition in the microfinance industry leads to a decline in the loan portfolio quality.

    AB - In recent years growing competition in the microfinance industry has been censured for multiple borrowing, default crises, high interest rates and coercive recovery of loans. Using the Boone indicator as a measure for competition, our paper investigates the impact of competition on microfinance institutions’ (MFIs) outreach, financial performance and quality of loan portfolio. We deal with the potential endogeneity issues by employing the instrumental variable approach using the generalized methods of moments (GMM) estimation technique. Analysing the Microfinance Information Exchange data our empirical results show that increased competition in microfinance sector leads to a larger average loans and a decrease in the financial self-sustainability. The data also supports the view that increased competition in the microfinance industry leads to a decline in the loan portfolio quality.

    KW - 511 Economics

    KW - microfinance institutions

    KW - competition

    KW - outreach

    KW - financial performance

    KW - capitalization

    KW - panel data IV estimation.

    M3 - Chapter

    T3 - Working Paper Series

    BT - Competition, performance and portfolio quality in microfinance markets

    PB - Uppsala University

    CY - Uppsala

    ER -

    Kar AK, Bali Swain R. Competition, performance and portfolio quality in microfinance markets. julkaisussa Competition, performance and portfolio quality in microfinance markets. Uppsala: Uppsala University. 2014. (Working Paper Series; 8).