Can Combined Microfinance Boost Economic Results? An Empirical Cross-sectional Analysis

Koen Rossel-Cambier

Review of Economics & Finance, 2012, vol. 2, 79-94

Abstract: Worldwide, microcredit organizations are gradually transforming to multi-servicing organizations offering additional financial services. This paper examines whether combining microcredit with insurance and/or savings enhances their economic performance measured by their efficiency, productivity, sustainability or portfolio quality indicators. Using cross-sectional data from 250 microfinance institutions (MFIs) from Latin America and the Caribbean, it compares MFIs offering credit only with those combining credit with respectively savings and/or insurance. A cross-sectional multiple regression analysis shows positive effects of both savings and insurance on the efficiency and productivity of MFIs. Taking into account various risks, this can be attributed to economies of scope, especially in a context of large and mature MFIs which exhibit organisational readiness. Surprisingly, the research didn't observe significant results relating to possible effects on the sustainability and portfolio quality of MFIs.

Keywords: Performance; Combined microfinance; Micro-insurance; Micro-savings (search for similar items in EconPapers)
JEL-codes: C3 G21 G22 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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