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Financial Efficiency and Social Impact of Microfinance Institutions
Louis, Philippe Seret, Alex Baesens, Bart
Louis, Philippe
Seret, Alex
Baesens, Bart
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2013
Journal
World development
Book
Publication Volume
46
Publication Issue
June
Publication Begin page
197
Publication End page
210
Publication NUmber of pages
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Abstract
This paper contributes to the literature by investigating whether the increased focus on financial self-sustainability of microfinance institutions has been disadvantageous to the target audience. We investigate the association between social efficiency and financial performance using a comprehensive data set that includes 650 microfinance institutions. A self-organizing map methodology is used to fully capture the existing heterogeneity among institutions. The results show that we cannot support the hypothesis that there exists a trade-off. On the contrary, we find evidence of a significant, positive relationship between social efficiency and financial performance.
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Keywords
Microfinance, Self-organizing Maps, Outreach, Social Impact, Profitability, Self-sustainability