Green Microfinance in Europe

Davide Forcella and Marek Hudon

No 14-020, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: Microfinance institutions (MFIs) are alternative financial providers offering financial services to people typically excluded from the standard banking sector. While most MFIs are active in developing countries, there is also a young and developing microfinance sector in Europe; however, very little literature exists on this MFI segment. In this paper, we analyze the environmental performance of 58 European MFIs. Our results suggest that the size of the MFI, investor concern for environmental performance and, to a lesser extent, donor interest, are closely related to the institution’s environmental performance. Moreover, providing loans larger than microcredits is linked to better environmental performance. This could suggest that the additional revenues generated from these loans, also called cross-subsidies, could help MFIs to strengthen their environmental bottom line. Finally, no evidence suggests that profit status explains environmental performance.

Keywords: Corporate Social Responsibility; Europe; Environment; Microcredit; Microfinance (search for similar items in EconPapers)
Pages: 36 p.
Date: 2014-08-19
New Economics Papers: this item is included in nep-env, nep-eur, nep-hme and nep-mfd
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