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- Bali Swain, Ranjula, et al.
(författare)
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Competition in Microfinance: Does it affect Performance, Portfolio quality and Capitalization?
- 2014
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Ingår i: Microfinance Institutions: Financial and Social Performance. - : Palgrave Macmillan.
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Bokkapitel (refereegranskat)abstract
- Growing competition amongst the microfinanceinstitutions (MFIs) in recent years has been blamed for the repayment crises inthe microfinance industry. This paper aims to investigate how competitionimpacts on MFIs’ outreach, financial performance, quality of loan portfolio andcapitalization. We control for potential endogeneity of the measures of marketpower. Employing Generalized Methods of Moments (GMM) estimation we find that increasedcompetition has no significant impact on MFIs’ depth of outreach andprofitability, but it can improve their capitalization levels. So, overall riskof MFIs’ can be offset to some extent by higher equity capital, if required ratios.
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| 3. |
- Bali Swain, Ranjula, et al.
(författare)
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Increased Competition among Microfinance Institutions and its effect on Outreach, Financial Performance and Efficiency: Recent Cross-country Evidence
- 2013
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- In recent years the growing competition amongst the microfinance institutions (MFIs), has been blamed for the ‘repayment crisis’ in the microfinance industry. This paper is a comprehensive investigation of the impact of competition on the MFIs’ financial performance, outreach, repayment and efficiency. Using instrumental variables (IV) estimations to account for the endogeneity issues, the analysis is based on the global Microfinance Information Exchange (MIX) database. Preliminary results suggest that increased competition leads to lower efficiency but does not have an impact on MFIs’ financial performance, its outreach or repayment.
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| 4. |
- Kar, Ashim, et al.
(författare)
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Competition, performance and portfolio quality in microfinance markets
- 2018
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Ingår i: European Journal of Development Research. - : Palgrave Macmillan. - 0957-8811 .- 1743-9728. ; 30:5, s. 842-870
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Tidskriftsartikel (refereegranskat)abstract
- 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.
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| 5. |
- Kar, Ashim, et al.
(författare)
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Interest Rates and Financial Performance of Microfinance Institutions : Recent Global Evidence
- 2014
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Ingår i: European Journal of Development Research. - : Springer Science and Business Media LLC. - 0957-8811 .- 1743-9728. ; 26:1, s. 87-106
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Tidskriftsartikel (refereegranskat)abstract
- Recent controversies regarding the high interest rates being charged by the microfinance institutions (MFIs) have been justified in the name of financial sustainability. This paper investigates whether MFIs’ high interest rates improve profitability, reduce repayment rates and lead to mission-drift. Within an agency theoretic framework, instrumental variables (IV) estimations have been employed to account for the endogeneity issues using a comprehensive global panel database consisting of 379 MFIs in 71 countries for 6 years—from 2003 to 2008. Results show that real yield on loan portfolio—a frequently-used proxy for interest rates—has positive and highly significant impact on MFIs’ financial performance and loan repayment rates. We further find that loan delivery methods have a significant impact on financial performance. Individual based lenders tend to show a greater profitability but only till a certain level. We also find that individual-based lenders are more prone to mission drift as compared to village banks.
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| 6. |
- Kar, Ashim Kumar, et al.
(författare)
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Are microfinance markets monopolistic?
- 2018
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Ingår i: Applied Economics. - : Routledge. - 0003-6846 .- 1466-4283. ; 58:1, s. 1-14
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Tidskriftsartikel (refereegranskat)abstract
- Do microfinance institutions (MFIs) operate in a monopoly, monopolistic competition environment or are their revenues derived under perfect competition markets? We employ the Panzar–Rosse revenue test on a global panel data to assess the competitive environment in which MFIs of five selected countries operate: Ecuador, India, Indonesia, Peru and Philippines, over the period 2005–2009. We estimate the static and the dynamic revenue tests, with analyses of the interest rate and the return on assets. We control for microfinance-specific variables such as capital-assets-ratio, loans-assets and the size of the MFI. The analyses also account for the endogeneity problem by employing the fixed-effects two-stage least squares and the fixed-effects system generalized method of moments. Our results suggest that MFIs in Peru and India operate in a monopolistic environment. We also find weak evidence that the microfinance industry in Ecuador, Indonesia and Philippines may operate under perfect competition.
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| 7. |
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| 8. |
- Kumar Kar, Ashim, et al.
(författare)
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Competition, performance and portfolio quality in microfinance markets
- 2014
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Rapport (övrigt vetenskapligt/konstnärligt)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.
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