scholarly journals Intended and unintended effects of specialized regulation on microfinance institutions’ double‐bottom line management

2021 ◽  
Author(s):  
Enrico Bellazzecca ◽  
Olga Biosca
Keyword(s):  
Unintended Effects ◽  
Microfinance Institutions ◽  
Bottom Line ◽  
Line Management

scholarly journals Market Structure and Double Bottom Line Commitments: Are They Aligned in Indian Microfinance Industry?

2019 ◽  
Vol 15 (1) ◽  
pp. 1-22
Author(s):  
Ambika Prasad Pati
Keyword(s):  
Market Structure ◽  
Market Share ◽  
Andhra Pradesh ◽  
Microfinance Institutions ◽  
Bottom Line ◽  
Crisis Period ◽  
Social Mission ◽  
Loan Size ◽  
High Degree

This article empirically examines the structure of Indian microfinance market and assesses its relationship with the double bottom line commitments of microfinance institutions. The market is found to be monopolistic in nature with high degree of concentration at the top, though a slow tendency of increased competition during the post-Andhra Pradesh crisis period is observed. Market share is found to be negatively related to average loan size and positively with number of active borrowers, indicating social commitments but with no relationship with profitability and sustainability. However, the post-crisis period portrays a departure from their social mission.

Double bottom line commitments of microfinance: evidence from Indian institutions

2019 ◽  
Vol 46 (1) ◽  
pp. 116-131 ◽  
Author(s):  
Prasenjit Roy ◽  
Ambika Prasad Pati
Keyword(s):  
Legal Status ◽  
Individual Characteristics ◽  
Microfinance Institutions ◽  
Bottom Line ◽  
Data Set ◽  
Causal Factors ◽  
Content Type ◽  
Governmental Organization ◽  
Long Run ◽  
The Individual

Purpose The purpose of the paper is to confirm the adherence of double bottom line objectives by the microfinance institutions (MFIs) of India and, further, to identify the causal factors that work out their double bottom line commitments. Design/methodology/approach The study uses an empirical data set for the period of 10 years, i.e. from 2005–2006 to 2014–2015, gathered from www.mixmarket.org. It follows an exploratory approach with overall and segmented performance analysis. Further, a panel data regression model is applied to identify the causal factors of double bottom line. Findings The study finds that MFIs are adhering to the notion of double bottom line. The segregated analysis does not give any solid indications of trade-off. The mature and small MFIs are found to be better in attaining social objective but the new and large are better in sustainability. The non-governmental organization (NGO) category is more committed to the double bottom line than the non-NGO. The causal analysis could not show any relationship between financial performance and outreach. Though age and outreach size show relationships with small loan sizes, they do not influence sustainability. The operating and financial expenses along with portfolio quality are found to be the main causal variables of sustainability. Practical implications There are indications for the policy makers to frame regulations and prepare a roadmap for the mature and the large MFIs. This would help them adhere to the double bottom line, which would further streamline the operations of the MFIs in the long run. Containing operating expenses and controlling the asset quality still remain to be the challenges which need to be addressed with proper policy guidelines. Originality/value The analysis of the study focuses on industry classifications, which make it more intriguing in nature given the fact of the varied features like age, legal status and outreach. India being the largest microfinance market in the world has limited studies. Most of the studies in double bottom line are based on a cross-country analysis, which generalizes the individual characteristics. The study fills this gap and adds to the understanding of the double bottom line commitments in the Indian context.

scholarly journals Efficiency Determinants of Microfinance Institutions in India: Two Stage DEA Analysis

2017 ◽  
Vol 1 (4) ◽  
pp. 87 ◽  
Author(s):  
Santa Kar ◽  
Joyeeta Deb
Keyword(s):  
Design Research ◽  
Positive Impact ◽  
Microfinance Institutions ◽  
Tobit Regression ◽  
Bottom Line ◽  
Parametric Data ◽  
Bad Output ◽  
Major Player ◽  
Measure Model ◽  
The Impact

Aim: In India, Microfinance Institutions (MFIs) emerged as major player in providing microfinance services and therefore such institutions need to be financially sustainable in order to achieve their double bottom-line objective. Besides, Indian MFIs cannot protect themselves from the curse of loan non-repayment. Therefore, this study aims to measure performance of the Indian MFIs and examine whether sustainability has any significant impact on the efficiency of the MFIs. Design / Research methods: In order to gauge the performance of the Indian MFIs, non parametric Data Envelopment Analysis (DEA) is adopted. Two models of DEA (BCC Model-input oriented and Undesirable Measure Model-output oriented) are applied used for better analysis. Further, to examine the factors influencing efficiency of the MFIs and particularly to answer whether Sustainability has any significant impact on efficiency, Tobit regression is applied in the study. Data of thirty-one Indian MFIs for seven years (2009-2015) are collected from MiX Market for the study. Conclusions / findings: Result of the study shows that average technical efficiency of the MFIs is estimated to be 79 percent under BCC model and 98 percent under Undesirable Measure Model. Indian MFIs can attain production frontier if they can trim their bad output (proxied by Portfolio at Risk 30) to an extent of around 14 percent. Further, the study validates that sustainability (proxied by Operational Self Sufficiency) has positive impact on efficiency. Originality / value of the article: Studies made so far on Indian MFIs have not addressed how the MFIs could become efficient by reducing their undesirable/bad output. Besides, no study so far has analysed the impact of sustainability on efficiency of the Indian MFIs. Therefore, this research tries to fill the existing research gap. Implications of the research: The result of the study can be useful to the Indian Microfinance Industry in improving their performance. The result can further be used by Reserve Bank of India (RBI) to frame yardstick for the clients of the MFIs in connection with borrowing loans from MFIs.

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