 Assessing financial and social performance of microfinance institutions over time: The case of the MC² network in CameroonIsabelle Piot-Lepetit () and
Joseph Nzongang
Post-Print from HAL Abstract: Microfinance institutions (MFIs) face a double bottom-line: financial sustainability and outreach to the poor. While some MFIs are able to achieve both objectives, even when following commercial purposes, others fail to provide financial services to poor people by emphasizing either their financial viability and focusing on the wealthiest of their clients at the border of the poverty line or their mission of fighting against poverty at the detriment of their financial sustainability, depending heavily on subsidies and putting at risk their survival and their social outcome at long-term. The objective of this research is to evaluate the financial and social performance of MFIs from the MC² (Mutuelles Communautaires de Croissance) network in Cameroon between 2008 and 2012. This network of MFIs has been created in 1992 to fight against poverty. The mission allocated to the entities of the network is the mobilization of savings and resources in rural communities in order to help them to become self-reliant in a sustainable manner by targeting people from a rural community; including the urban elite with origins in it that provides an important share of financial resources necessary to launch and maintain a mutual fund. The period under scrutiny covers the end of the global financial crisis of 2007-2008 until a more recent period where economies are recovering from the shock. First, the chapter provides a brief literature review on the concept of MFIs performance based on the two components of financial sustainability and outreach to the poor and on main findings regarding the potential trade-off between financial and social performance and the mission drift issue. Then, a methodology based on a production frontier approach using the Data Envelopment Analysis technique and Malmquist indexes is presented and used to evaluate the overall performance of MFIs as well as its decomposition into elements separating the impact of management practices of MFIs from external effects. Finally, results from the case study are described at the network level, but also by age and size changes of each MFI during the period in order to provide a more comprehensive evaluation of their performance, a characterization of potential mission drifts, and an understanding of the impact of the 2008 global financial crisis. The main conclusion is that the trade-off or mission drift issue in microfinance cannot receive a single and simple answer. Keywords: trade-off; data envelopment analysis; Malmquist productivity index; technical change; operational efficiency; global financial crisis; microfinance; microfinance institutions; mission drift; Cameroon (search for similar items in EconPapers) Published in Cameroon in the 21st Century: Challenges and Prospects. Volume 2: Environment and People, 2, Nova Science Publishers, 2017, African Political, Economic, and Security Issues, 978-1-53612-164-3 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02785151 Access Statistics for this paper More papers in Post-Print from HAL |
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