Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization?

Ashim Kumar Kar; Ranjula Bali Swain

Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization?

Ashim Kumar Kar
, Ranjula Bali Swain

Forskningsoutput: Kapitel i bok/rapport/konferenshandling › Kapitel › Vetenskaplig › Peer review

Sammanfattning

Growing competition amongst the microfinanceinstitutions (MFIs) in recent years has been blamed for the repayment crises in the microfinance industry. This paper aims to investigate how competition impacts on MFIs’ outreach, financial performance, quality of loan portfolio and capitalization. We control for potential endogeneity of the measures of marketpower. Employing Generalized Methods of Moments (GMM) estimation we find that increased competition has no significant impact on MFIs’ depth of outreach and profitability, but it can improve their capitalization levels. So, overall risk of MFIs’ can be offset to some extent by higher equity capital ratios, if required.

Originalspråk	engelska
Titel på värdpublikation	Microfinance Institutions : Financial and Social Performance
Redaktörer	Roy Mersland , Øystein Strøm
Antal sidor	21
Utgivningsort	Basingstoke
Förlag	Palgrave Macmillan
Utgivningsdatum	2014
Sidor	206-226
ISBN (tryckt)	9781137399656
ISBN (elektroniskt)	9781137399663
Status	Publicerad - 2014
MoE-publikationstyp	A3 Del av bok eller annan forskningsbok
Evenemang	European Research Conference on Microfinance - Kristiansand, Norge Varaktighet: 10 juni 2013 → 12 juni 2013 Konferensnummer: 3

Publikationsserier

Namn	Palgrave Studies in Impact Finance

Vetenskapsgrenar

511 Nationalekonomi

Åtkomst av dokument

Kar and Bali Swain 2014 Book ChapterAccepterat manuskript från författare, 332 KB

Competition, Performance and Trade-offs in Microfinance A Research Outline for Randomized Evaluation of Targeted Credit Interventions
Kar, A. (Projektledare)
09/01/2012 → 31/08/2014
Projekt: Forskningsprojekt

Citera det här

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title = "Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization?",

abstract = "Growing competition amongst the microfinanceinstitutions (MFIs) in recent years has been blamed for the repayment crises in the microfinance industry. This paper aims to investigate how competition impacts on MFIs{\textquoteright} outreach, financial performance, quality of loan portfolio and capitalization. We control for potential endogeneity of the measures of marketpower. Employing Generalized Methods of Moments (GMM) estimation we find that increased competition has no significant impact on MFIs{\textquoteright} depth of outreach and profitability, but it can improve their capitalization levels. So, overall risk of MFIs{\textquoteright} can be offset to some extent by higher equity capital ratios, if required. ",

keywords = "511 Economics, microfinance institutions, competition, outreach, financial performance, capitalization, panel data IV estimation.",

author = "Kar, \{Ashim Kumar\} and \{Bali Swain\}, Ranjula",

year = "2014",

language = "English",

isbn = "9781137399656 ",

series = "Palgrave Studies in Impact Finance",

publisher = "Palgrave Macmillan",

pages = "206--226",

editor = "\{Mersland \}, Roy and {\O}ystein Str{\o}m",

booktitle = "Microfinance Institutions",

address = "United Kingdom",

note = "European Research Conference on Microfinance ; Conference date: 10-06-2013 Through 12-06-2013",

}

Kar, AK & Bali Swain, R 2014, Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization? i R Mersland & Ø Strøm (red), Microfinance Institutions : Financial and Social Performance. Palgrave Studies in Impact Finance, Palgrave Macmillan, Basingstoke, s. 206-226, European Research Conference on Microfinance, Kristiansand, Norge, 10/06/2013.

Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization? / Kar, Ashim Kumar; Bali Swain, Ranjula.
Microfinance Institutions : Financial and Social Performance. red. / Roy Mersland ; Øystein Strøm. Basingstoke: Palgrave Macmillan, 2014. s. 206-226 (Palgrave Studies in Impact Finance).

Forskningsoutput: Kapitel i bok/rapport/konferenshandling › Kapitel › Vetenskaplig › Peer review

TY - CHAP

T1 - Competition in Microfinance

T2 - European Research Conference on Microfinance

AU - Kar, Ashim Kumar

AU - Bali Swain, Ranjula

N1 - Conference code: 3

PY - 2014

Y1 - 2014

N2 - Growing competition amongst the microfinanceinstitutions (MFIs) in recent years has been blamed for the repayment crises in the microfinance industry. This paper aims to investigate how competition impacts on MFIs’ outreach, financial performance, quality of loan portfolio and capitalization. We control for potential endogeneity of the measures of marketpower. Employing Generalized Methods of Moments (GMM) estimation we find that increased competition has no significant impact on MFIs’ depth of outreach and profitability, but it can improve their capitalization levels. So, overall risk of MFIs’ can be offset to some extent by higher equity capital ratios, if required.

AB - Growing competition amongst the microfinanceinstitutions (MFIs) in recent years has been blamed for the repayment crises in the microfinance industry. This paper aims to investigate how competition impacts on MFIs’ outreach, financial performance, quality of loan portfolio and capitalization. We control for potential endogeneity of the measures of marketpower. Employing Generalized Methods of Moments (GMM) estimation we find that increased competition has no significant impact on MFIs’ depth of outreach and profitability, but it can improve their capitalization levels. So, overall risk of MFIs’ can be offset to some extent by higher equity capital ratios, if required.

KW - 511 Economics

KW - microfinance institutions, competition, outreach, financial performance, capitalization, panel data IV estimation.

M3 - Chapter

SN - 9781137399656

T3 - Palgrave Studies in Impact Finance

SP - 206

EP - 226

BT - Microfinance Institutions

A2 - Mersland , Roy

A2 - Strøm, Øystein

PB - Palgrave Macmillan

CY - Basingstoke

Y2 - 10 June 2013 through 12 June 2013

ER -

Competition in Microfinance: Does it affect Performance, Portfolio Quality and Capitalization?

Sammanfattning

Publikationsserier

Vetenskapsgrenar

Åtkomst av dokument

Projekt

Competition, Performance and Trade-offs in Microfinance A Research Outline for Randomized Evaluation of Targeted Credit Interventions

Citera det här