Microfinance institutional growth: How driven forces impact their financial integration?

Sandra, Kendo and Chicot, Eboue (2016): Microfinance institutional growth: How driven forces impact their financial integration? Forthcoming in: Economic Development and Culture Change No. Under review

Abstract

This article analyses the growth of microfinance by examining how some driven forces heighten more or less their financial integration. Three main driven forces identify: agency costs, financial development and trade-off in microfinance. The author samples 542 microfinance institutions. Quantile regression applies to analyze difference effects. The results first reveal that high financial development can easily improve financial integration of microfinance, by expanding rate of external investors. Nevertheless, as viewed, high financial integration can also reach where financial development is low. Then, there is inverse link between agency costs and financial integration of MFIs. At last outreach performs better than financial performance in improving their financial integration. There is no mission drift across quantiles and status. Microfinance institutions that plan to increase their average loans with an increase of their number of active borrowers perform better in a financial integration.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial integration, microfinance, financial development, agency costs, financial performance and outreach
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries

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