Economic Governance of MFIs: Inside the Black Box

Thankom Arun and Samuel Annim

No 5159, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates a relationship between economic governance and the dual objectives of Microfinance Institutions (MFIs): poverty reduction and financial viability. Using an unbalanced panel of 531 MFIs the important role of other institutions such as country-level business registry departments in facilitating targeting of poor clients is illuminated. Comparing the estimates of Hausman-Taylor and Fixed Effects Vector Decomposition allows us to scrutinize and at least partially correct the effects of both time invariant and slow changing endogenous variables. We find that credit information availability and lesser time in securing property enhances the chances of MFIs in achieving their poverty reduction objective. Product diversification leading to economies of scope also enables MFIs to reach poor clients. On the basis of the above, it is imperative for government and development partners to channel their efforts towards provision of an enabling atmosphere that will enhance the achievement of microfinance social objectives.

Keywords: microfinance; dual objectives; economic governance; property rights; credit information (search for similar items in EconPapers)
JEL-codes: G21 G39 L20 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010-08
New Economics Papers: this item is included in nep-mfd
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://docs.iza.org/dp5159.pdf (application/pdf)

Related works:
Working Paper: Economic governance of MFIs:Inside the black box (2010)
Working Paper: Economic Governance of MFIs: Inside the Black Box (2010)
Working Paper: Economic Governance of MFIs: Inside the Black Box (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp5159

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().