scholarly journals Unearthing the Double Bottom Line Commitments of Indian Microfinance Institutions

2017 ◽  
Vol 9 (1) ◽  
pp. 14
Author(s):  
Prasenjit Roy
Keyword(s):  
Social Development ◽  
Financial Performance ◽  
Social Performance ◽  
Microfinance Institutions ◽  
Bottom Line ◽  
Trade Off ◽  
Success Stories ◽  
Small Domain

The microfinance industry has emerged from a small domain institution to a broad tool for social development, as many success stories reveal its true potential for serving the society. Nonetheless, like every institution, it has to be sustainable in carrying out its developmental activities. This is where the idea of double bottom line surfaces where a win-win situation is attained for the microfinance institutions along with the clients to whom they are serving. Although there are other unprincipled grounds associated with the concept which obstruct this thought and deviates the MFI activities in accomplishing better and higher revenues. This leads to a trade-off. The paper tries to explore the presence the double bottom line in the MFIs of India. Further, to find if there is a trade-off between financial performance and social performance. A dataset comprising all the Indian MFIs reported in www.mixmarket.org for the period from 2009 to 2013 has been used for the study. The analysis is carried on various indicators that resemble the performance and efficiency of the MFIs. The evidence suggests a moderate trade-off in the operations of the Indian MFIs although largely they adhere to the double bottom line. They are mainly guided by outreach scale in terms of a number of borrowers.

Islamic and Conventional Micro-Financing in the MENA Region

2020 ◽  
pp. 216-239
Author(s):  
Imene Berguiga ◽  
Yosra Ben Said ◽  
Philippe Adair
Keyword(s):  
Middle East ◽  
Financial Performance ◽  
North Africa ◽  
Financial Services ◽  
Social Performance ◽  
Microfinance Institutions ◽  
Mena Region ◽  
Trade Off ◽  
The Social ◽  
Conventional Services

The performance of MicroFinance Institutions (MFIs) is analysed for the period 2004-2015. Sample consists of 67 MFIs in the Middle East and North Africa region. It includes a subsample of 18 Islamic MFIs (IMFIs), whereof Solebusiness grants exclusively Islamic financial services and Window provides both Islamic and conventional services. A model of simultaneous equations with interacting variables tests seven hypotheses addressing financial performance, social performance, and the social and financial performance relationship. Conventional MFIs (CMFIs) experience higher financial performance than IMFIs and Window experiences higher financial performance than Solebusiness; IMFIs do not experience higher social performance than CMFIs; whether conventional or Islamic, MFIs face a financial vs. social performance trade-off.

scholarly journals Profiting from Poverty? A Case Study of UK based Microfinance Institutions

2015 ◽  
Vol 2 (2) ◽  
Author(s):  
Nitin Navin
Keyword(s):  
Developing Countries ◽  
Financial Performance ◽  
Financial Services ◽  
Social Performance ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Trade Off ◽  
External Capital

The success of the microfinance movement is beyond doubt. However, as the scope of the sector increased and commercialised, some problems of it became evident. Issue of profitability and sustainability of Microfinance institutions (MFIs) and, use of external capital by them are the two most debatable issues of the microfinance sector. The current study investigates these issues by targeting MFIs and consultants of microfinance sector located in UK. These MFIs and consultants have operations in different poor and developing countries. The study found that believing that MFIs can alone eliminate poverty is a fallacy. Any such belief by the policymakers will make further delay in eradicating poverty. The study also found that financial sustainability of microfinance seems to remain unachievable for most of the MFIs and, that there are fair chances of having trade-off between financial performance and social performance for those MFIs. On this line of thought, the study concludes by arguing that microfinance cannot be treated only as a substitute of the traditional financial services.

Knowledge mapping of microfinance performance research: a bibliometric analysis

2021 ◽  
Vol 48 (3) ◽  
pp. 399-418
Author(s):  
Shabiha Akter ◽  
Md Hamid Uddin ◽  
Ahmad Hakimi Tajuddin
Keyword(s):  
Financial Performance ◽  
Bibliometric Analysis ◽  
Social Performance ◽  
Credit Scoring ◽  
Basic Research ◽  
Future Research ◽  
Knowledge Mapping ◽  
Microfinance Institutions ◽  
Content Type ◽  
Bibliometric Review

PurposePerformance assessment of microfinance institutions (MFIs) has long been a question of considerable research interest. The dual goals – financial performance and social performance of MFIs widely studied yet remain unsolved in the existing literature. To assess the knowledge structure of research in this area and to aid future research, we review the literature with bibliometric analysis.Design/methodology/approachOur study has used bibliographic data of 1,252 scientific documents indexed in the Scopus database from 1995 to 2020 (June 05). We have used the “bibliometrix” package in R language to analyze the data and illustrate the findings.FindingsWe find that there has been an increasing trend in publications, especially from 2006 onwards. Various bibliometric indicators allow us to follow the progression of knowledge along with identifying the most contributing and impactful authors, publication sources, institutions and countries. We illustrate the major research themes and identify that “poverty alleviations”, “group lending” and “credit scoring” are the major emerging and specialized themes besides the basic research evolved around “microfinance” or “microcredit”. Our further analysis of thematic evolution over different time frames reveals that “financial performance” aspect is getting more attention in recent times in evaluating the performance of MFIs.Originality/valueThe insights of knowledge accumulated from our bibliometric review and thematic analysis provide researchers with an efficient comprehension of the advancement of the research on microfinance performance and offer avenues for future scientific endeavors.

An integrated framework for analysing performance indicators of Indian microfinance institutions: a multi-stakeholder perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amit Kumar Bardhan ◽  
Barnali Nag ◽  
Chandra Sekhar Mishra ◽  
Pradeep Kumar Tarei
Keyword(s):  
Decision Making ◽  
Financial Performance ◽  
Performance Indicators ◽  
Social Performance ◽  
Microfinance Institutions ◽  
Dyadic Relationship ◽  
Content Type ◽  
Integrated Framework ◽  
Overall Performance ◽  
Performance Dimensions

PurposeAn amalgamation of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytical Network Process (ANP) has been performed to develop a decision-making framework for improving the overall performance of the microfinance institutions. A primary survey was conducted to collect real-time data from the heterogeneous stakeholders of microfinance institutions across India. The validation of the proposed framework is performed by comparing the results against the conventional method of Analytical Hierarchy Process (AHP).Design/methodology/approachThis study identifies various dimensions and indicators for measuring the performance of Indian microfinance institutions. Additionally, the ranking and prioritisation of the performance dimensions and indicators is obtained by considering the mutual interrelation between them.FindingsThe study indicates that there exists a significant dyadic relationship between financial performance and social performance for improving the overall performance of the microfinance institutions. Governance is found to unidirectionally influence both financial and social performance. Among all the considered dimensions, financial performance of a microfinance institution is the most critical dimension for improving the overall performance. The top five performance indicators of the Indian microfinance institutions are funding source, borrowing and overhead cost, size of the firm, end-use of the money and depth of outreach.Research limitations/implicationsThe study was conducted in the context of Indian microfinance institutions; hence the scope of generalisation of the results is limited. This research considers both subjective and objective aspect of the performance dimensions and indicators from the perspective of multiple stakeholders (i.e. firm, society and regulator). The integrated framework is expected to aid in improving overall performance of microfinance institutions by focusing on the most critical (high prioritised) performance indicators.Originality/valueAn integrated DEMATEL-ANP framework is used in the domain of microfinance to assess the performance dimensions. This study is unique in terms of analysing performance of microfinance institutions from the perspective of heterogeneous stakeholders.

Study of collaborative PRM business model for sustainability

2017 ◽  
Vol 24 (7) ◽  
pp. 1891-1911 ◽  
Author(s):  
Ankita Ray ◽  
Sandeep Mondal
Keyword(s):  
Supply Chain ◽  
Financial Performance ◽  
Business Model ◽  
Economic Performance ◽  
Business Models ◽  
Social Performance ◽  
Primary Objective ◽  
Business Strategies ◽  
Bottom Line ◽  
Content Type

Purpose Sustainable development comprises three bottom line concepts, i.e. protect environment, improve economic performance, and social performance. Business organization with only profitability as the primary objective may lead to a highly competitive market which mainly focuses on financial performance and pay less attention to environmental and social performance. Companies that adopt the product recovery activities also select economic performance as the prime priority of their business objectives. The purpose of this paper is to give a brief idea about a different kind of business model other than conventional business models. Here, the authors aim to represent collaboration among firms, companies, and players within a closed-loop supply chain (CLSC) to build a leading business model that establishes three basic concepts of sustainability. Design/methodology/approach From literature the authors identified that the primary objective of establishing a sustainable business model is environmental issues but achieving economic performance and gaining market share increase competition among companies. The authors also identified that increasing financial performance results in the development of a competitive business model. This literature review helps to represent the concept of collaborative business model, its benefit, and its mechanism and also helps to compare it with competitive business model in terms of sustainability. Findings In case of the collaborative business model, the authors found that collaboration is better than competition to sustain in the market. The authors described the collaborative business model and mechanism of both competitive and collaborative business strategies in a CLSC. The authors gave an idea to adopt some well-known business model and pricing policies for the collaborating firms. The authors presented a comparison between the collaborative and competitive business model and also identified different types of collaborative and completive relationship among the players within a CLSC. Originality/value Government legislations, e-waste rules, and environmental rules involve original equipment manufacturer (OEM) for taking back its end-of-life (EOL)/end-of-use products. A collaborative business model helps OEM to manage those huge amounts of used products by involving third parties within the supply chain. Here, in this paper the authors represent different collaborative parties and their purpose for collaboration, and also represent a strong belief that collaborative business model is the recent trend for establishing sustainability than competitive business model.

Determinants of the Performance of African Microfinance Institutions

2014 ◽  
Vol 3 (4) ◽  
pp. 45-58 ◽  
Author(s):  
Mohamed Wajdi Triki ◽  
Younes Boujelbene
Keyword(s):  
Factor Analysis ◽  
Performance Evaluation ◽  
Literature Review ◽  
Financial Performance ◽  
Social Performance ◽  
Financial Indicators ◽  
Microfinance Institutions ◽  
Mena Region ◽  
Financial Transparency

Performance evaluation is part of the chain of financial transparency which involves the production, verification, analysis, synthesis, dissemination and use of information on the financial performance of a micro-finance institution (MFI). In this study, the authors will try to show the convergence or divergence between social performance and the financial performance by answering the following question: are there to arbitration / compatibility between the two types of performance. To answer this question, this study will be organized in such manner the first section outlines a brief literature review of microfinance in terms of both welfarist approaches (social) and institutionalists. The second section describes the characteristics of the sample of 141 MFIs in 21 countries in the MENA region and Africa based on the year of 2005 and 2010. By defining the variables that identify each type of performance with a new index created for social performance called “Depth of Outreach” (noted DEPTH). The financial performance is described by financial indicators namely profitability, portfolio quality and productivity. The authors finish this study by a third section which presents the main results of a factor analysis applied to the sample in order to study the nature of relationship between the two types of performance.

scholarly journals Microfinance Complementarity and Trade-Off between Financial Performance and Social Impact

2015 ◽  
Vol 7 (11) ◽  
pp. 128 ◽  
Author(s):  
Trong V. Ngo
Keyword(s):  
Financial Performance ◽  
Financial Services ◽  
Poverty Reduction ◽  
Social Impact ◽  
Economies Of Scale ◽  
Generalized Method Of Moments ◽  
Microfinance Institutions ◽  
Trade Off ◽  
The Poor ◽  
Trade Offs

There is a widespread belief that providing access to financial services (microfinance) or reaching the poor with microcredit are perfect solutions to establish a sustainable economy or to help kick-start a bottom-up recovery and social development animated by the poor themselves through self-employment and microenterprises. Microfinance has therefore become an important instrument for poverty alleviation and for improving the welfare of the poor in both developing and transition economies. Due to the difficulty of targeting the poor, who have a lack of collateral, microfinance institutions (MFIs) are called on to achieve a balance between social impact (poverty reduction) and positive financial performance. This paper assumes that the financial objectives of MFIs operate in opposition to each other and that a trade-off is inevitable. Unbalanced panel data of MFIs for the period 1995-2013 has been extracted from the MIX Market website. In order to solve the endogeneity problem, this paper employed the dynamic system GMM (generalized method of moments) of Blundell and Bond (1998) that is considered as the new methodology currently in use in the empirical investigation of the financial performance in banking and finance. This paper outlines some of the parameters that affect the nature of trade-offs and complementarities between social and financial objectives in microfinance performance, and provides empirical evidence from cross-country analysis. Sustainability has a positive link with outreach. MFIs tend to expand their outreach in order to achieve sustainability, based on the advantages of the economies of scale. However, a threshold which makes the trade-offs or complementarities between financial and social objectives reverse if it goes beyond a certain point is also observed.

scholarly journals The Influence of CSR Practices on the Financial Performance of Microfinance Institutions in Togo

2021 ◽  
Vol 13 (2) ◽  
pp. 52
Author(s):  
Akouvi Gadedjisso-Tossou ◽  
Curwitch P’ham Bodjona ◽  
Maman Tachiwou Aboudou ◽  
Jean-Pierre Gueyie
Keyword(s):  
Principal Component Analysis ◽  
Social Responsibility ◽  
Financial Performance ◽  
Least Squares ◽  
Significant Influence ◽  
Social Performance ◽  
Principal Component ◽  
Generalized Least Squares ◽  
Microfinance Institutions ◽  
Least Squares Techniques

Microfinance pursues a dual objective: reduce poverty (social performance) and ensure lasting profitability (financial performance). However, beyond these two performances, microfinance institutions (MFIs) have a social responsibility (CSR) towards their stakeholders. The main objective of this article is to measure the influence of the CSR practices of Togolese MFIs on their financial performance. The analysis is conducted over a sample of 60 Togolese MFIs, using the principal component analysis and generalized least squares techniques. The results show that CSR through the dimensions customer, employees and community positively and significantly impact on the financial performance of MFIs when measured by ROA, while the environment dimension has a negative significant influence.

Sign in / Sign up

Export Citation Format

Share Document