 Is there a trade-off between financial performance and outreach in south asian Microfinance institutions?Sanju Adhikary and George Papachristou Journal of Developing Areas, 2014, vol. 48, issue 4, 381-402 Abstract: Falling government and donor funding, which has traditionally supported microfinance, is followed by an expansion of financially self-sustainable Microfinance Institutions (MFIs). This development has raised the concern as to whether the social goals of traditional microfinance would be equally well served in the new environment in as much as financial performance and outreach compete with each other. In this paper, we empirically examine this relation between financial performance and outreach of MFIs in a panel of South Asian countries from 2003 to 2009 using random effects modeling and general method of moments (GMM) estimation. We find that: (a) breadth and depth of outreach are positively associated to profitability and efficiency, and (b) depth in contrast to breadth mitigates risks. Overall, our findings do not confirm a statistically significant negative relation between financial performance and outreach goals, suggesting that a financially sustainable microfinance expansion can achieve its social goals at an acceptable credit risk level. Keywords: Microfinance Institutions; Outreach; Efficiency; Profitability; Credit Risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.48:year:2014:issue4:pp:381-402 Access Statistics for this article More articles in Journal of Developing Areas from Tennessee State University, College of Business Contact information at EDIRC. |
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