Performance and trade‐offs in Microfinance Organisations—Does ownership matter?

Roy Mersland () and Reidar Øystein Strøm
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Roy Mersland: UIA - University of Agder

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Abstract: Abstract Policy advocates argue for the transformation of non‐government Microfinance Organisations (MFOs) into shareholder owned firms (SHFs). This paper investigates whether the proposed superiority of shareholder owned MFOs is empirically supported. The findings indicate that the difference between shareholder owned MFOs and non‐government MFOs is minimal. Our results contradict established paradigms and policy guidelines in the industry. However, the results are not necessarily surprising since ownership theories support our findings. So do also studies from the general banking markets as well as historical studies. Adaptation of legal frameworks allowing well‐performing NGOs to mobilise savings appears to be a better option than transformation. Copyright © 2008 John Wiley & Sons, Ltd.

Keywords: Microfinance; performance; outreach; trade-offs; transformation; ownership; corporate governance; Microfinance performance outreach trade-offs transformation ownership corporate governance (search for similar items in EconPapers)
Date: 2008
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Published in Journal of International Development, 2008, 20 (5), pp.598-612. ⟨10.1002/jid.1432⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05220839

DOI: 10.1002/jid.1432

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