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

Sandra Kendo () and Eboue Chicot

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Financial integration; microfinance; financial development; agency costs; financial performance and outreach (search for similar items in EconPapers)
JEL-codes: G21 G32 O57 (search for similar items in EconPapers)
Date: 2016-03-01
New Economics Papers: this item is included in nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70225

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