Business Management Models of Microfinance Institutions (MFIs) in Africa: A Study into Their Enabling Environments

Nadya Pashkova, Andres Trujillo-Barrera, George Apostolakis, Gert Van Dijk, Periklis D. Drakos and George Baourakis
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Nadya Pashkova: Marketing and Consumer Behaviour Group, Wageningen University, Wageningen, The Netherlands
Andres Trujillo-Barrera: Marketing and Consumer Behaviour Group, Wageningen University, Wageningen, The Netherlands
Gert Van Dijk: Social Venturing Economics and Impact Investment at TIAS, Tilburg University, Tilburg, The Netherlands
Periklis D. Drakos: Department of Economics, University of Crete, Heraklion, Greece
George Baourakis: Mediterranean Agronomic Institute of Chania (CIHEAM-MAICh), Chania, Greece and Nyenrode Business University, Breukelen, The Netherlands

International Journal of Food and Beverage Manufacturing and Business Models (IJFBMBM), 2016, vol. 1, issue 2, 63-82

Abstract: In this study, the authors analyse the socioeconomic, political and geographic conditions that are conducive of cooperative microfinance initiatives in comparison with other organizational forms in Africa. They distinguish three types of institutions (MFIs) and business models: cooperatives/credit unions, non-profit or non-governmental (NGOs and commercial banks). To analyse the enabling environment for the three business models three types of factors are distinguished: macroeconomic policy, institutional, and geographical. Multinomial logistic regression is applied to investigate the impact of these external conditions. The authors use data on 1790 MFIs in selected African countries (MIX Market) and global socioeconomic data of these countries. Their findings reveal that irrespective geographic location, cooperatives feature in countries with civil law systems, low inflation rates and high levels of economic growth. Commercial MFIs (banks) feature particularly in the countries with common law legal systems. NGO type MFIs are associated with high inflation rates and low levels of economic growth.

Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jfbmbm:v:1:y:2016:i:2:p:63-82

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