Incentive scheme and productivity in microfinance institutions in Benin

Denis Acclassato Houensou and Melain Modeste Senou

MPRA Paper from University Library of Munich, Germany

Abstract: This article aims to analyze the productive effects of financial and non-financial incentive in microfinance institutions in Benin. We estimate a Cobb-Douglas production function augmented by the Incentive Scheme on an unbalanced panel of 14 registered MFIs over the period 2007-2017. The findings of this study show that non-financial incentives positively impact the outreach whereas the financial incentives have a negative effect on outreach. They further suggest that a well-designed incentive scheme is a powerful tool to overcome free riding and other asymmetric information problems in a costly monitoring environment.

Keywords: Financial incentive; Non-Financial Incentive; Productivity; MFI; Benin (search for similar items in EconPapers)
JEL-codes: D21 O31 (search for similar items in EconPapers)
Date: 2019-07-31, Revised 2019-08-02
New Economics Papers: this item is included in nep-cfn, nep-hrm and nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:95379

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