We suggest an explanation for the existence of “mission drift”, tendency Microfinance Institutions (MFIs) to lend money wealthier borrowers rather than very poor. focus on relationship between MFIs and external funding institutions. assume that both institutions are pro-poor agree optimal proportion funds be granted poorer borrower. However, asymmetric information effort chosen by MFI identify ...

This study focuses on the supplemented strategies of microfinance institutions (MFIs), in which the MFI offers nonfinancial services, such as entrepreneurship related knowledge, in addition to financial services to impoverished borrowers at the bottom of the pyramid (BoP). We examine two contextual factors–foreign direct investment (FDI) and loan defaults–to better understand the relationship b...

The mission of microfinance institutions (MFIs) is two-fold, serving poor clients and financial sustainability. Yet, there is a concern that MFIs have prioritized financial objectives over outreach objectives by adopting characteristics of commercialized capital structure. A growing number of MFIs have transformed their capital structure from donations and concessional loans to a structure that...

Abstract The topic of financial sustainability in microfinance institutions has become more important as an increasing number Microfinance Institutions (MFIs) seek operational self-sufficiency, which translates into sustainability. This study aims to identify factors that drive self-sufficiency institutions. To accomplish this, 416 MFIs sub-Saharan Africa are studied and several drivers for emp...

In this paper we provide an analysis of credit risk management and the use of credit scoring among European MFIs. With this aim, we designed and sent a survey to the full set of known MFIs operating in Eastern and Western Europe. 58 MFIs completed the survey. We observe that the European microfinance industry has already dedicated substantial effort to risk management, noting that more than hal...

Recent years have seen an explosion in the use of Peer-to-Peer (P2P) lending, in which websites such as Kiva and Microplace offer individuals the ability to make loans to microfinance borrowers across the developing world. Such sites offer a fascinating new example of a two-tiered monitoring device in which micro-finance institutions (MFIs) maintain dynamic relationships with borrowers and P2P ...

Microfinance programs play a vital role in poverty alleviation developing countries; however, most microfinance institutions (MFIs) face the challenge of maintaining financial sustainability. While several studies have investigated factors affecting MFI sustainability, only few focus on MFIs Thailand. This paper uses random effect model to study determinants Thai MFIs’ Results show that sustain...

Microfinance Institutions (MFIs) were introduced to reach a large number of active poor people who are excluded from the formal financial institutions due rigorous collateral requirements. As an instrument MFIs, was address need people. To operate successfully MFIs have unquestionable ensure that loan expended Micro and Small Enterprises (MSEs) be repaid back so as he can financially sustainabl...