Competition, performance and portfolio quality in microfinance markets

Ashim Kumar Kar, Ranjula Bali Swain

    Tutkimustuotos: ArtikkelijulkaisuArtikkeliTieteellinenvertaisarvioitu

    Abstrakti

    Growing competition in microfinance has been blamed for multiple borrowing, over-indebtedness and loan repayment crisis in recent times. Using the Boone indicator as a proxy for competition, we investigate how competition impacts microfinance institutions’ (MFIs’) outreach, financial performance and quality of loan portfolio in this paper. The analysis is based on data from 568 MFIs in 10 vibrant microfinance markets (Bangladesh, Bolivia, Ecuador, India, Indonesia, Mexico, Nepal, Nicaragua, Peru and Philippines) for the period 2003-2014. We control for potential endogeneity of MFI performance, competition and other covariates by employing the generalized methods of moments (GMM) estimation technique. We find that increased competition leads to higher profitability and better loan portfolio quality of the sampled MFIs, but worsens depth of outreach to the poor, which is an indication of mission drift.
    Alkuperäiskielienglanti
    LehtiEuropean Journal of Development Research
    Vuosikerta30
    Numero5
    Sivut842-870
    Sivumäärä29
    ISSN0957-8811
    DOI - pysyväislinkit
    TilaJulkaistu - 2018
    OKM-julkaisutyyppiA1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä, vertaisarvioitu

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