Journal articles: 'Microfinance institutions – Africa'

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Musanganya, Isabelle, Chantal Nyinawumuntu, and Pauline Nyirahagenimana. "THE IMPACT OF MICROFINANCE BANKS IN RURAL AREAS OF SUB-SAHARAN AFRICA." International Journal of Research -GRANTHAALAYAH 5, no. 9 (September 30, 2017): 80–90. http://dx.doi.org/10.29121/granthaalayah.v5.i9.2017.2201.

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Many researchers consider microfinance as a tool for poverty reduction. Even more, especially in post-conflict African countries, micro-financial institutions are seen as an opportunity of reconciliation. Lending from microfinance institutions to that from traditional banks and examine their respective effects upon economic growth has been practiced in some sub-Saharan countries. Considerable progress in research has been found that microfinance loans raise growth comparatively to that of traditional banks. A lot of number of researches carried out in sub-Saharan countries even in other developing countries outside of Africa did not find strong evidence that bank loans raise growth. There is, however, some evidence that bank loans do increase investment, whereas microfinance loans do not appear to do so. Differently, other researchers highlighted clearly that microfinance can provide its contribution on poverty reduction and better access to finance needed for startup micro-entrepreneurs along the world. These results suggest that microfinance loans are not primarily invested as physical capital in developing countries, but could still augment total factor productivity, whereas banks may have been financing non-productive investments. Herein, we highlighted the impact of microfinance banks on developing countries economic growth. We also indicate how microfinances system incorporated in rural areas boosted the lifestyle of poor people in Sub-Saharan Africa.

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Tadele, Haileslasie, Helen Roberts, and Rosalind H. Whiting. "Microfinance institutions’ transparency in Sub-Saharan Africa." Applied Economics 50, no. 14 (August 25, 2017): 1601–16. http://dx.doi.org/10.1080/00036846.2017.1368993.

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Pashkova, Nadya, Andres Trujillo-Barrera, George Apostolakis, Gert Van Dijk, Periklis D. Drakos, and George Baourakis. "Business Management Models of Microfinance Institutions (MFIs) in Africa." International Journal of Food and Beverage Manufacturing and Business Models 1, no. 2 (July 2016): 63–82. http://dx.doi.org/10.4018/ijfbmbm.2016070105.

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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.

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Bahadur BK, Dr Man, and Medani P. Bhandari. "Microfinance Institutions: Instrumental for Promoting Financial Inclusion." Financial Markets, Institutions and Risks 5, no. 2 (2021): 72–85. http://dx.doi.org/10.21272/fmir.5(2).72-85.2021.

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This opinion paper provides a general overview of microfinance / microcredit which is considered one the major program to minimize the poverty, women empowerment and to socioeconomically inclusive society. There are number of success and failure stories mostly from Africa, Asia, and Latin America; however, the microfinance is global agenda of contemporary world. Based secondary sources, and own experience, the paper provides the general overview of microcredit, its success, the obstacles of microfinance and outlines very brief cases of Nepal and Bangladesh. And finally, paper provides a brief recommendation on how microcredit can be successful especially to the developing world.

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Olugbenga, Sanya, and Polly Mashigo. "The impact of microfinance on microenterprises." Investment Management and Financial Innovations 14, no. 3 (October 11, 2017): 82–92. http://dx.doi.org/10.21511/imfi.14(3).2017.08.

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The provision of and access to financial services, particularly credit, can contribute greatly to the development of microenterprises in South Africa. Such provision has been an issue ignored by conventional banks or formal financial institutions. The problem associated with this ignorance includes high transaction and operation costs, lack of collateral, and the inability to obtain information about microenterprises resulting in difficulties to extend such credit. Microfinance therefore becomes an alternative to conventional banking and a mainstream and sustainable development activity for extending credit to microenterprises. However, the benefits of microfinance, which include, among others, the ability to provide the much-needed financial support for microenterprises, have not been fully harnessed in South Africa. The objective of this article is to evaluate the impact of microfinance on microenterprises in a typical South African township and to propose specialized financial mechanisms to support and improve the provision of credit to microenterprises. The article draws on the findings of a study undertaken in the Ga-Rankuwa township located in the Tshwane Metropolitan area in the Gauteng province of South Africa. It further draws on a wide range of extensive review of literature that documents the impact of microfinance on microenterprises. A case study approach is adopted and mixed method research paradigm (qualitative and quantitative) is used to gather information. Structured questionnaires and interviews were used to solicit information from the randomly selected microfinance institutions and microenterprises in the Ga-Rankuwa township.

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Alhassan, Yahaya, and Uzoechi Nwagbara. "Institutions, Corruption and Microfinance Viability in Developing Countries: the Case of Ghana and Nigeria." Economic Insights – Trends and Challenges 2021, no. 2 (2021): 61–70. http://dx.doi.org/10.51865/eitc.2021.02.06.

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This article focuses on the role corrupt institutions (microfinance institutions) play in microfinance not being accessible for business development in Africa. It specifically sheds light on the contexts of Nigeria and Ghana to tease out the challenges and opportunities for small businesses consequent upon a culture of corruption in these countries and associated challenges for small business owners and entrepreneurs as well as microbusiness development. As well-known, in many developing countries with a high level of corruption, there is potentially a high incidence of institutional void, which presents setback and challenges for businesses to thrive. Microbusiness development relies largely on effective institutions to develop, and in situations where institutions are corrupt, these challenges are rather redoubled thus posing a threat to entrepreneurship development. Therefore, these contexts enable us to understand and interrogate the challenges facing microbusiness development, where corrupt microfinance institutions exist, as well as business opportunities if these corrupt institutions were not present. Thus this paper argues that for businesses to thrive enabling and effective institutional mechanisms are crucial, which will facilitate opportunities for microbusiness development.

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Maru, Teresa. "Warning to microfinance institutions in Africa: innovate or die." Enterprise Development and Microfinance 20, no. 4 (December 2009): 258–60. http://dx.doi.org/10.3362/1755-1986.2009.026.

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Nihel Halouani, Nihel Halouani. "Transforming Microfinance Institutions: What about the poorest in Africa?" IOSR Journal of Business and Management 8, no. 2 (2013): 45–55. http://dx.doi.org/10.9790/487x-0824555.

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Tadele, Haileslasie, Helen Roberts, and Rosalind H. Whiting. "Transparency and microfinance institutions' risk in Sub-Saharan Africa." International Journal of Corporate Governance 9, no. 2 (2018): 201. http://dx.doi.org/10.1504/ijcg.2018.091277.

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Tadele, Haileslasie, Rosalind H. Whiting, and Helen Roberts. "Transparency and microfinance institutions' risk in Sub-Saharan Africa." International Journal of Corporate Governance 9, no. 2 (2018): 201. http://dx.doi.org/10.1504/ijcg.2018.10011965.

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Joseph, Owino O., and Francis Kibera. "Organizational Culture and Performance: Evidence From Microfinance Institutions in Kenya." SAGE Open 9, no. 1 (January 2019): 215824401983593. http://dx.doi.org/10.1177/2158244019835934.

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The study aimed at determining the influence of organizational culture on the performance of microfinance institutions in Kenya. A descriptive cross-sectional survey design was adopted. Secondary data were collected from annual reports by the Association of Microfinance Institutions in Kenya and the Microfinance Rating Africa. Primary data were collected using structured questionnaire targeting the chief executive officer, human resource manager, and marketing manager. Data were analyzed using factor analysis and hierarchical regression. Our analysis identifies clan and hierarchy as the dominant cultural typologies in the microfinance industry. The results obtained demonstrate that organizational culture has a significant influence on non market performance. In addition, market culture is inversely associated with debt/equity ratio. We conclude that organizational culture is a major source of sustainable competitive advantage in the microfinance industry. Furthermore, we conclude that market culture promotes financial independence and sustainability in the long term.

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Quao, Kwami Hope. "Conceptual Framework for Enhancing the Implementation of Specific Microfinance Policies in Sub-Sahara Africa." International Journal of R&D Innovation Strategy 1, no. 1 (January 2019): 33–45. http://dx.doi.org/10.4018/ijrdis.2019010103.

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Deficient policy formulation processes and inadequate monitoring and supervision remain factors impeding the growth of microfinance in sub-Saharan Africa. This article explores issues mitigating policy implementation for microfinance institutions to propose a framework that will integrate stakeholders in the microfinance sector for effective financial policy implementation and promotion of microfinance performance and growth. The article proposes financial monitoring policy ownership structure and argues for the creation of an independent national microfinance supervisory authority as an alternative to ensuring effective implementation of microfinance policies in Ghana. This framework, the authors argue, will enhance stakeholder engagement in police formulation and create the necessary implementation environment, with adequate information, in which policy implementation for microfinance will flourish.

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Worku, Yohannes, and Mammo Muchie. "The survival of business enterprises and access to finance: the case of 4 African countries." Problems and Perspectives in Management 17, no. 1 (March 26, 2019): 326–38. http://dx.doi.org/10.21511/ppm.17(1).2019.28.

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Microfinance institutions render essential services to start-up small, micro, medium-sized enterprises (SMMEs) by way of extending loans to entrepreneurs. SMMEs operating in South Africa have relatively better access to microfinance loans in comparison with those operating in Nigeria, Kenya and Ethiopia. A survey was conducted in order to compare the relative ease of access to microfinance loans in South Africa, Nigeria, Kenya and Ethiopia based on a survey conducted in the four Sub-Saharan African countries. The ease of access to microfinance loans was assessed based on criteria defined by Barry and Tacneng (2014). A total of 401 SMMEs participated in the study. Loan applicants were asked to provide answers to questions that indicated the ease of securing loans and meeting loan repayment conditions. Emphasis was placed on the demand for collateral as a requirement for extending loans to applicants, the assessment of entrepreneurial and auditing skills of loan applicants, the difficulty of meeting loan repayment conditions, and adherence to regulations and guidelines recommended by governments. Descriptive, bivariate and multivariate methods of data analyses were used for data analyses. The study found that about 21% of SMMEs were satisfied with the ease of securing loans, whereas the remaining 79% of SMMEs did not. The ease of access to microfinance loans varied by country in which South African loan applicants were the most satisfied in comparison with the remaining three countries. Securing microfinance loans, as well as fulfilling loan repayment conditions were easiest in South Africa, and most difficult in Ethiopia. In terms of ease of securing loans and meeting loan repayment conditions, the order of nations was ranked as South Africa, Nigeria, Kenya and Ethiopia. In all four countries, the ease of access to microfinance loans was influenced by country of business operation, extent of benefits realized by SMMEs, and highest level of formal education.

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Bongomin, George Okello Candiya, Atsede Woldie, and Aziz Wakibi. "Microfinance accessibility, social cohesion and survival of women MSMEs in post-war communities in sub-Saharan Africa: Lessons from Northern Uganda." Journal of Small Business and Enterprise Development 27, no. 5 (June 30, 2020): 749–74. http://dx.doi.org/10.1108/jsbed-12-2018-0383.

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PurposeGlobally, women have been recognized as key contributors toward livelihood and poverty eradication, especially in developing countries in sub-Saharan Africa. This is due to their great involvement and participation in micro small and medium enterprises (MSMEs) that create employment and ultimately economic growth and development. Thus, the main purpose of this study is to establish the mediating role of social cohesion in the relationship between microfinance accessibility and survival of women MSMEs in post-war communities in sub-Saharan Africa, especially in Northern Uganda where physical collateral were destroyed by war.Design/methodology/approachThe data for this study were collected using a pre-tested semi-structured questionnaire from 395 women MSMEs who are clients of microfinance institutions in post-war communities in Northern Uganda, which suffered from the 20 years' Lord Resistance Army (LRA) insurgency. The Analysis of Moment Structures (AMOS) software was used to analyze the data and the measurement and structural equation models were constructed to test for the mediating role of social cohesion in the relationship between microfinance accessibility and survival of women MSMEs in post-war communities.FindingsThe results revealed that social cohesion significantly and positively mediate the relationship between microfinance accessibility and survival of women MSMEs in post-war communities in Northern Uganda. The results suggest that the presence of social cohesion as a social collateral promotes microfinance accessibility by 14.6% to boost survival of women MSMEs in post-war communities where physical collateral were destroyed by war amidst lack of property rights among women. Similarly, the results indicated that social cohesion has a significant influence on survival of women MSMEs in post-war communities in Northern Uganda. Moreover, when combined together, the effect of microfinance accessibility and social cohesion exhibit greater contribution towards survival of women MSMEs in post-war communities in Northern Uganda. Indeed, social cohesion provides the social safety net (social protection) through which women can access business loans from microfinance institutions for survival and growth of their businesses.Research limitations/implicationsThis study concentrated mainly on women MSMEs located in post-war communities in developing countries in sub-Saharan Africa with a specific focus on Northern Uganda. Women MSMEs located in other regions in Uganda were not sampled in this study. Besides, the study focused only on the microfinance industry as a major source of business finance. It ignored the other financial institutions like commercial banks that equally provide access to financial services to micro-entrepreneurs.Practical implicationsThe governments in developing countries, especially in sub-Saharan Africa where there have been wars should waive-off the registration and licensing fees for grass-root associations because such social associations may act as social protection tools through which women can borrow from financial institutions like the microfinance institutions. The social groups can provide social collateral to women to replace physical collateral required by microfinance institutions in lending. Similarly, the governments, development agencies, and advocates of post-war reconstruction programs in developing countries where there have been wars, especially in sub-Saharan Africa should initiate the provision of group business loans through the existing social women associations. This may offer social protection in terms of social collateral in the absence of physical collateral required by the microfinance institutions in lending. This may be achieved through partnership with the existing microfinance institutions operating in rural areas in post-war communities in developing countries. Additionally, advocates of post-war recovery programs should work with the existing microfinance institutions to design financial products that suit the economic conditions and situations of the women MSMEs in post-war communities. The financial products should meet the business needs of the women MSMEs taking into consideration their ability to fulfil the terms and conditions of use.Originality/valueThis study revisits the role of microfinance accessibility in stimulating survival of women MSMEs as an engine for economic growth in the presence of social cohesion, especially in post-war communities in sub-Saharan Africa where physical collateral were destroyed by war. It reveals the significant role of social cohesion as a social protection tool and safety net, which contributes to economic outcomes in the absence of physical collateral and property rights among women MSMEs borrowers, especially in post-war communities.

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Boubacar, Hamadou. "Women’s presence in top management and the performance of microfinance institutions in West Africa." International Journal of Social Economics 47, no. 2 (December 19, 2019): 207–22. http://dx.doi.org/10.1108/ijse-06-2019-0365.

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Purpose The purpose of this paper is to investigate the relationship between the presence of women in senior management and the performance of microfinance organizations in the West African Economic and Monetary Union (WAEMU). Design/methodology/approach Using a data set of 266 microfinance institutions (MFIs) for the period 2013–2017, the study assesses the impact of women’s representation in senior management and on the boards of West African MFIs on these institutions’ financial and social performance. Findings The results indicate that board size and diversity positively and significantly affect the social performance of MFIs, particularly in relation to women’s participation in decision-making regarding expanding services to poor people. In essence, greater gender diversity at the board and management levels promotes the social orientation of MFIs. Research limitations/implications The low representation of women on boards and as managers makes it difficult to more accurately determine the true impact of women in senior positions on MFIs performance. Practical implications The author recommends minimum quotas for women in the top management of MFIs. This would help these institutions incorporate key skills and actively involve all members. Also, regulation places constraints on the ability of West African MFIs to mobilize deposits and this negatively impacts their financial performance. Originality/value This investigation highlights the importance of including women in the top management of MFIs to improve these institutions’ performance. It also underscores an interesting problem and answers questions raised in the existing literature by either rejecting or confirming the findings. As players in the microfinance sector recognize that board diversity is important for the success of any microfinance institution, this paper helps shed light on the situation of these organizations in the WAEMU. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-06-2019-0365

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Bayai, Innocent, and Sylvanus Ikhide. "Financing structure and outreach of selected SADC microfinance institutions (MFIS)." Corporate Ownership and Control 13, no. 3 (2016): 284–92. http://dx.doi.org/10.22495/cocv13i3c2p3.

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This paper probes the link between financing structure and outreach noting the commercialization trend for selected Southern Africa Development Community (SADC) MFIs. Assuming MIX panel data on 60 MFIs, this study tackles outreach depth and breadth – a diversion from an outreach depth-centered study which employed Planet Rating data on 74 Sub-Saharan African MFIs. Robust panel methods show that, both outreach depth and breadth are affected by the same variables, though in a different way. Equity, deposits and ‘new’ MFIs significantly further depth whilst borrowings limit depth. Breadth is constrained by borrowings, equity and ‘new’ MFIs while deposits expand the breadth. We suggest that, permitting MFIs to collect deposits go a long way in spurring outreach depth and breadth.

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Chikalipah, Sydney. "Do microsavings stimulate financial performance of microfinance institutions in Sub-Saharan Africa?" Journal of Economic Studies 45, no. 5 (October 8, 2018): 1072–87. http://dx.doi.org/10.1108/jes-05-2017-0131.

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Purpose The purpose of this paper is to investigate the empirical relationship between microsavings and the financial performance of microfinance institutions (MFIs) in Sub-Saharan Africa (SSA). Design/methodology/approach The approach in this paper is decidedly empirical, and employs data obtained from Microfinance Information eXchange (MIX). The data set consists of 350 microfinance MFIs domiciled in 36 Sub-Saharan African countries for the period covering 1998–2012. Findings The panel estimation results consistently show that there exists a negative and statistically significant relationship between microsavings and the financial performance of MFIs in SSA. This is perhaps surprising, albeit rational considering the exceedingly elevated operating expenses that ascend from mobilizing and managing microsavings, ceteris paribus, that could erode firm profitability. The paper draws policy implications from these important findings. Research limitations/implications Even though generalized method of moment estimation technique was employed and robustness checks, the issue of endogeneity cannot be eliminated entirely. Practical implications Microfinance industry is one of the fastest growing segments of the financial sector in SSA. The industry is increasingly becoming the core of financial inclusion in the region where two-thirds of the adult population lack access to formal financial services. Therefore, gaining an in-depth understanding of the role microsavings play in the financial performance of MFIs can contribute to the growth of the industry. Originality/value This study is timely considering the significant growth in the number of microsavings – there are currently twice as many microsavings accounts in SSA as there are microcredits. More importantly, based on 400 MFIs, that reported data to MIX in 2016, the total microsavings stood at about US$11bn against an aggregate loan portfolio of about US$10.5bn. The remarkable growth of microsavings in SSA, from less than US$100m in 2000 to US$11bn in 2016, is the main motivation of undertaking this study.

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Triki, Mohamed Wajdi, and Younes Boujelbene. "Determinants of the Performance of African Microfinance Institutions." International Journal of Sustainable Economies Management 3, no. 4 (October 2014): 45–58. http://dx.doi.org/10.4018/ijsem.2014100105.

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Performance evaluation is part of the chain of financial transparency which involves the production, verification, analysis, synthesis, dissemination and use of information on the financial performance of a micro-finance institution (MFI). In this study, the authors will try to show the convergence or divergence between social performance and the financial performance by answering the following question: are there to arbitration / compatibility between the two types of performance. To answer this question, this study will be organized in such manner the first section outlines a brief literature review of microfinance in terms of both welfarist approaches (social) and institutionalists. The second section describes the characteristics of the sample of 141 MFIs in 21 countries in the MENA region and Africa based on the year of 2005 and 2010. By defining the variables that identify each type of performance with a new index created for social performance called “Depth of Outreach” (noted DEPTH). The financial performance is described by financial indicators namely profitability, portfolio quality and productivity. The authors finish this study by a third section which presents the main results of a factor analysis applied to the sample in order to study the nature of relationship between the two types of performance.

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Chikalipah, Sydney. "Financial leverage and profitability of microfinance institutions in sub-Saharan Africa." Enterprise Development and Microfinance 30, no. 1 (March 2019): 4–21. http://dx.doi.org/10.3362/1755-1986.18-00009.

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Chikalipah, Sydney. "Optimal sources of financing for microfinance institutions in sub-Saharan Africa." Development in Practice 29, no. 3 (October 15, 2018): 395–405. http://dx.doi.org/10.1080/09614524.2018.1519011.

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Mori, Neema, Trond Randøy, and Sougand Golesorkhi. "Determinants of Board Structure in Microfinance Institutions: Evidence from East Africa." Journal of Emerging Market Finance 12, no. 3 (December 2013): 323–65. http://dx.doi.org/10.1177/0972652713512916.

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Ben Abdelkader, Ines, and Faysal Mansouri. "Performance of microfinance institutions in the MENA region: a comparative analysis." International Journal of Social Economics 46, no. 1 (January 14, 2019): 47–65. http://dx.doi.org/10.1108/ijse-06-2017-0242.

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Purpose The purpose of this paper is to provide preliminary efficiency assessment of Arab microfinance institutions (MFIs) within the period 2002–2012. Microfinance is defined as the provision of financial services to poor and low-income households and their microenterprises on a sustainable basis. Design/methodology/approach The authors first present the main features of microfinance in the Middle East and North Africa (MENA) region. Second, based on a simple of 72 microfinance institutions issued from ten countries of the region, they develop a bootstrap–data envelopment analysis (bootstrap–DEA) framework to measure Arab MFIs’ efficiency. Finally, they apply parametric and non-parametric tests to compare the performance and identify factors that contribute to the efficiency of Arab Islamic microfinance institutions. Findings Efficiency scores of the MENA region exhibit high variability, both across time and countries. Significant difference in efficiency was found due to MFI age or regulation. Results also reveal the ability of Arab MFIs to combine social and financial performance and their solidity in time of crisis. Originality/value In this paper, the authors apply DEA–bootstrap method on a large sample of Arab MFI with special look at the peer group differences. Unlike most previous relevant studies, the paper overcomes many of the drawbacks of the DEA method by using, in addition to the DEA–bootstrap approach, a test of return to scale and a combination of three procedures to detect outliers. Furthermore, this paper analyses the efficiency of MFI in the MENA region in the light of financial crises and Arab Spring.

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Abdulai, Adams, and Devi Datt Tewari. "Efficiency of microfinance institutions in sub – Saharan Africa: a stochastic frontier approach." Ghana Journal of Development Studies 13, no. 2 (October 17, 2016): 117. http://dx.doi.org/10.4314/gjds.v13i2.7.

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Mosley, Paul, and June Rock. "Microfinance, labour markets and poverty in Africa: a study of six institutions." Journal of International Development 16, no. 3 (March 30, 2004): 467–500. http://dx.doi.org/10.1002/jid.1090.

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Mori, Neema, Sougand Golesorkhi, Trond Randøy, and Niels Hermes. "Board Composition and Outreach Performance of Microfinance Institutions: Evidence from East Africa." Strategic Change 24, no. 1 (January 2015): 99–113. http://dx.doi.org/10.1002/jsc.2000.

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Zainuddin, Mohammad, and Ida Md Yasin. "Resurgence of an Ancient Idea? A Study on the History of Microfinance." FIIB Business Review 9, no. 2 (May 13, 2020): 78–84. http://dx.doi.org/10.1177/2319714520925933.

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Microfinance revolution, as it was frequently called, did not happen overnight. Microfinance has a long history of evolution, from a simple idea to a global movement, through which it came into the present shape. But much of its history is yet to be written systematically. In fact, there is no historical research so far from the perspective of microfinance. Little is thus known about the early history of some of the oldest forms of lending to the poor. The current study offers a historical look at microfinance and aims at documenting the evolution of modern microfinance institutions. The object of the research is to recognize the historical depth of microfinance and give a picture of how this idea emerged and developed overtime. The study reveals that moneylending to the poor was always in existence in various forms in different periods of time in both developing and developed countries. It has a long history, particularly in Asia but also in Africa and Europe.

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Gassama, Saikou, Hamidah, and Erina Sudaryati. "The Need for Introduction of Sharia Microfinance Program in the Gambia." Economit Journal: Scientific Journal of Accountancy, Management and Finance 1, no. 3 (August 31, 2021): 153–64. http://dx.doi.org/10.33258/economit.v1i3.483.

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The Gambia is a 95 percent Muslim country that is located in the western part of Africa. The population of the country is around 2.5 m. The Gambia is largely dependent on Agriculture, tax, tourism, and foreign aid and is ranked 178, in the Human Development Index 2019, the Gambia is classified as a country with medium human development. The paper used the literature review method. Currently, there is various microfinance program that has been existing for years, but none of them are having Islamic microfinance loan products until recently when two are lunched, as a result, some did not take their loans and even those who take it is hard to change their lives because it is purely for profit-making and also the higher interest rate for some of them. Islamic Microfinance would be the best development instrument for the population of Gambia. The microfinance institutions in The Gambia are very well expanded, they are the main source of credit to the Gambian population both rural and urban. Therefore it will be very important if microfinance institutions in the Gambia can introduce sharia microfinance. The objective of this paper is to suggest ways to introduce sharia microfinance in The Gambia and the benefits of sharia microfinance. The results of this study find out that Islamic microfinance is a viable loan product that can work in the Gambia, there are various kinds of Islamic microfinance products that can work for the poor in the Gambia, such as farmers, gardeners, and market vendors or SMEs. And Islamic microfinance could be the best way of eradicating poverty in the Gambia, since it is not based on the predetermined interest rate and have various suitable loan schemes, if well implemented can change lives.

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Adams, Abdulai, and Devi Datt Tewari. "Impact of regulation on microfinance institutions sustainability and outreach in sub-Saharan Africa." African Journal of Business and Economic Research v15, no. 3 (July 7, 2020): 11–34. http://dx.doi.org/10.31920/1750-4562/2020/v15n3a1.

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Chikalipah, Sydney. "Financial sustainability of microfinance institutions in sub-Saharan Africa: evidence from GMM estimates." Enterprise Development and Microfinance 28, no. 3 (September 2017): 182–99. http://dx.doi.org/10.3362/1755-1986.16-00023.

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Awaworyi Churchill, Sefa. "Sustainability and depth of outreach: Evidence from microfinance institutions in sub-Saharan Africa." Development Policy Review 36 (May 14, 2018): O676—O695. http://dx.doi.org/10.1111/dpr.12362.

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Forkusam, Akem. "Cross-Border Funding and Microfinance Mission Drift: Evidence from Sub-Saharan Africa." Journal of International Business and Economy 17, no. 2 (December 1, 2016): 20–40. http://dx.doi.org/10.51240/jibe.2016.2.3.

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Sub-Saharan Africa (SSA) has become the top priority for international funders and they are now increasing their cross-border funding to microfinance institutions (MFIs) in the region. This foreign funding is considered an additional source of capital for MFIs in the region who are facing difficulties in meeting the demand of the poor. However, these funds are provided by public and private funders who each have different motives. The paper examines the impact of these different sources of funding on microfinance performance and mission drift in SSA, which is the world’s poorest region. The study utilizes data from 212 MFIs in 30 SSA countries accessed over a three-year period (i.e. 2007, 2009, and 2011). The findings show that cross-border funding does not affect either the social or financial performance of MFIs when time and country effects are accounted for.

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Baumann, Ted. "Pro-poor microcredit in South Africa: cost-efficiency and productivity of South African pro-poor microfinance institutions." Development Southern Africa 21, no. 5 (December 2004): 785–98. http://dx.doi.org/10.1080/0376835042000325705.

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Wassie, Solomon Bizuayehu, Hitoshi Kusakari, and Masahiro Sumimoto. "Performance of Microfinance Institutions in Ethiopia: Integrating Financial and Social Metrics." Social Sciences 8, no. 4 (April 11, 2019): 117. http://dx.doi.org/10.3390/socsci8040117.

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Since their inception in the 1970s, microfinance institutions (MFIs) have received increasing attention both from policymakers and academic circles. Using unbalanced panel data (2000–2017) from Ethiopia, in this paper, we investigated the performance of MFIs and its determinants on the one hand and whether or not mission drift exists on the other hand. To this end, we employed seemingly unrelated regression (SUR) and fixed/random effect panel models. The results indicate that, based on different outreach and financial performance metrics, the MFIs in Ethiopia have good performance compared with those of the 10 biggest economies in Sub-Saharan Africa (SSA). The econometric estimation results show that asset holding and the yield on gross portfolio have a positive and significant effect on the social and financial performances of MFIs in Ethiopia. Furthermore, the number of loan officers, loan officer productivity, and personnel productivity have a positive and significant impact on the financial performance of MFIs. Our results also suggest that the null hypothesis—that MFIs are not shifting away from poorer clients—cannot be rejected, implying that there is no mission drift by MFIs in Ethiopia.

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Arnone, Marco, Carlo Bellavite Pellegrini, Andrea Messa, Laura Pellegrini, and Emiliano Sironi. "Microfinance institutions in Africa, Asia, and Latin America: an empirical analysis of operational efficiency, institutional context and costs." International Journal of Economic Policy in Emerging Economies 5, no. 3 (2012): 255. http://dx.doi.org/10.1504/ijepee.2012.051366.

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Abdulai, Adams, and Devi Datt Tewari. "Trade-off between outreach and sustainability of microfinance institutions: evidence from sub-Saharan Africa." Enterprise Development and Microfinance 28, no. 3 (September 2017): 162–81. http://dx.doi.org/10.3362/1755-1986.16-00014.

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Ayodele, Esan, Sanjay Misra, Robertas Damasevicius, and Rytis Maskeliunas. "Hybrid microgrid for microfinance institutions in rural areas – A field demonstration in West Africa." Sustainable Energy Technologies and Assessments 35 (October 2019): 89–97. http://dx.doi.org/10.1016/j.seta.2019.06.009.

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Abdullah, Moha Asri, Muhammad-Bashir Owolabi Yusuf, and Nasim Shah Shirazi. "Regulatory Framework for Member-Owned Islamic Microfinance Institutions ( Mimis ) in Sub-Saharan Africa ( SSA )." Journal of Islamic Economics Banking and Finance 12, no. 1 (2016): 120–36. http://dx.doi.org/10.12816/0028316.

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Nyanzu, Frederick, James Atta Peprah, and Ayi Gavriel Ayayi. "Regulation, Outreach, and Sustainability of Microfinance Institutions in Sub‐Saharan Africa: A Multilevel Analysis." Journal of Small Business Management 57, sup2 (November 1, 2019): 200–217. http://dx.doi.org/10.1111/jsbm.12467.

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Norgaard, Julia R. "Modeling the Propensity to Default on Microloans in Mali, Africa." Journal of Mason Graduate Research 3, no. 2 (May 5, 2016): 97. http://dx.doi.org/10.13021/g8ws3r.

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Microfinance is a global phenomenon that is focused on sustainable poverty alleviation. By providing people in developing countries with the capital to sustain themselves and an educational background on which to build their futures, microfinance institutions (MFIs) have given the poor an opportunity to get out of poverty. For the purposes of this study, a specific MFI in Mali Africa was utilized to model the propensity for micro-borrowers to default on their loans. Using the MFI’s historical data on each of their loans, this study models the repayment percentage of individual loans, contingent upon qualitative and quantitative factors. Employing an Ordinary Least Squares Model I am able to analyze how each independent factor influences default rates. I also harness fuzzy analysis to group together factors that contribute to high default rates. I hypothesize that high default rates were encouraged by a longer time between payments, a large initial loan size, business development in investment heavy industries, and starting a business in a hostile market environment. By utilizing these results, the MFI can optimize its loan repayment success by targeting specific borrowers and modifying their loan structure. The purpose of this study is to provide the Mali MFI with tangible results that they can utilize to increase their loaning effectiveness. This model is important because microfinance is a relatively new field and 3it seeks to improve the Mali MFI’s poverty alleviating capacity.

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Berguiga, I., Y. Ben Said, and P. Adair. "The Social and Financial Performance of Microfinance Institutions in the Middle East and North Africa Region: Do Islamic Institutions Outperform Conventional Institutions?" Journal of International Development 32, no. 7 (June 11, 2020): 1075–100. http://dx.doi.org/10.1002/jid.3488.

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Karlan, Dean S., and Jonathan Zinman. "Credit Elasticities in Less-Developed Economies: Implications for Microfinance." American Economic Review 98, no. 3 (May 1, 2008): 1040–68. http://dx.doi.org/10.1257/aer.98.3.1040.

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Policymakers often prescribe that microfinance institutions increase interest rates to eliminate their reliance on subsidies. This strategy makes sense if the poor are rate insensitive: then microlenders increase profitability (or achieve sustainability) without reducing the poor's access to credit. We test the assumption of price inelastic demand using randomized trials conducted by a consumer lender in South Africa. The demand curves are downward sloping, and steeper for price increases relative to the lender's standard rates. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rates, which is consistent with binding liquidity constraints. (JEL G21, O16)

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Fombang, MccPowell Sali, and Charles Komla Adjasi. "Access to finance and firm innovation." Journal of Financial Economic Policy 10, no. 1 (April 3, 2018): 73–94. http://dx.doi.org/10.1108/jfep-10-2016-0070.

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Purpose The study aims to examine the importance of access to finance in firm innovation by using firm-level data from the World Bank enterprise survey (WBES) on selected African countries. Design/methodology/approach This study utilises firm-level data from the WBES database and computes aggregate innovation index by using multiple correspondent analysis. The authors then apply instrumental variable models (to control for possible endogeneity between innovation and finance) to assess the link between finance and innovation. Findings The research finds that finance in the form of overdraft overwhelmingly drives innovation in all selected countries – Cameroon, Kenya, Morocco, Nigeria and South Africa. Trade credit enhances innovation among firms in Nigeria, South Africa and Cameroon, while asset finance drives innovation amongst firms in Cameroon, Nigeria and South Africa. Practical implications Policy incentives such as tax breaks could be put in place for financial intermediaries that have shown proof of extending loans to financially constraint firms to enable them to innovate. Furthermore, different financial institutions such as microfinance institutions can be supported to increase credit to enterprises. Partnerships with organisations willing to fund firms and support start-ups should be encouraged. One of such support mechanisms could be specialised schemes such as a credit guarantee scheme to encourage and secure lending to enterprises to promote innovation. Originality/value This paper provides empirical insights into how finance enhances innovation in African enterprises. It also shows how different finance structures (overdraft, asset finance and trade credit) affect firm innovation in different African countries.

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Wellen, Lukas, and Meine Pieter Van Dijk. "NEW FINANCIAL TECHNOLOGIES AND 4TH INDUSTRIAL REVOLUTION IN THE THIRD WORLD (THE EXAMPLE OF CUSTOMER CARE OF M-PESA, KENYA)." EUrASEANs: journal on global socio-economic dynamics, no. 2(9) (March 30, 2018): 07–12. http://dx.doi.org/10.35678/2539-5645.2(9).2018.07-12.

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A well-functioning financial sector in developing countries is extremely important for economic development. This requires local institutions, which originally were often state-controlled, but gradually non-state actors conquered the financial market. Recently the growing importance of alternative forms of finance in many African countries has become remarkable. Although often created by donors, their role changed when financial inclusion, economic liberalisation and decentralization became more important. Microfinance institutions started to compete with banks by also offering a broad range of services (loans, savings, transfers, accounts, insurance). This is a frugal innovation (less regulated financial institutions compete with regulated ones at a lower cost). Meanwhile, mobile payment revolution has been taking place in Africa and other developing regions. This article analyzes these developments and suggests that these new financial technologies contribute substantially to the 4th industrial revolution in the third world countries. Financial resources that become more available replaces development initiatives and allows developing countries finance industrial and agricultural revolutions with local money. We will deal in detail with one example – the role of M-Pesa in helping people to be 'financially included' and trying to learn from their experience with customer satisfaction for other countries.

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Chikalipah, Sydney. "Does the pursuit of outreach consistently stifle the financial performance of microfinance institutions in sub-Saharan Africa?" Development in Practice 30, no. 3 (January 6, 2020): 409–20. http://dx.doi.org/10.1080/09614524.2019.1680607.

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Amoako-Adu, Ben, and Joseph P. Eshun. "SME Financing in Africa: Collateral Lending vs Cash Flow Lending." International Journal of Economics and Finance 10, no. 6 (May 15, 2018): 151. http://dx.doi.org/10.5539/ijef.v10n6p151.

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It is argued that economic growth in Africa will be enhanced by the expansion of small and medium-sized enterprises (SMEs) but these businesses face financing constraints which tend to hinder their business success. Starting from a discussion of the various sources of financing for SMEs in Africa, it is established that the most effective and cheapest source of capital for the SMEs is debt financing from banking and other microfinance institutions because of lender monitoring and the tax-deductibility of the interest expense. However, collateral requirement which tends to be a major significant factor for mitigating the credit risk of the SMEs presents a problem to lending institutions because of market illiquidity, legal, administrative, and valuation difficulties. SMEs tend to be owned by low income entrepreneurs and families who normally do not have tangible, valuable and liquid collaterals, and even when collaterals are offered, it is a challenge to determine their market value. Often these problems result in the rejection of SME loan applications. As a solution to this problem, the paper introduces a concept of cash flow lending as a better alternative to the traditional asset-backed lending. While asset-backed or collateral lending emphasizes loan default and recovery from collaterals, cash flow lending is based on projected corporate positive cash flows, the required return of equity, equity valuation of the business, and finally, on the risk-sharing principle between the lender and borrower. For the loan application to be approved, the requested loan and all existing debts of the SME should be less than the equity value of the company as estimated from the free cash flow model.

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Adamou, Ntieche, Forbeneh Agha Jude, Mbondo Georges Dieudonné, and Bilguissou Abba. "Effect of the Socioeconomic Characteristics of Borrowers on Microcredit Repayment Behaviour: An Application to a Category II Microfinance Institution in Cameroon." Journal of Economics and Management Sciences 3, no. 2 (June 15, 2020): p47. http://dx.doi.org/10.30560/jems.v3n2p47.

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The purpose of this study is to determine the influence of socioeconomic characteristics of borrowers on microcredit repayment behaviour. The results of Probit regression statistical analysis using a database of 1805 individual loan contracts, credit records and follow-up files from 2007 to 2014 period by Community Credit of Africa (CCA) in Cameroon, reveal that educational level, awareness about the location of business and/or home of borrowers by the lender, sector of activities, availability of collateral, income stability, and personal wealth of borrowers have a statistically significant influence on microcredit repayment behaviour of borrowers. The outcome of the results shows that microfinance institutions should not only rely on financial indicators to assess the creditworthiness of borrowers. Other factors belonging to the social and economic characteristics of the borrowers are supposed to be integrated in credit risk models. These factors are sought to influence significantly microcredit repayment behaviour of borrowers.

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Bigirimana, Moïse, and Xu Hongyi. "Financial Inclusion in Rwanda: an Analysis of Role Played by Commercial Banks." INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE AND BUSINESS ADMINISTRATION 4, no. 2 (2018): 25–31. http://dx.doi.org/10.18775/ijmsba.1849-5664-5419.2014.42.1003.

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The purpose of this research is to analyze the role played by commercial banks on financial inclusion in Rwanda. Rwanda which is seen as a model of fast development in Africa has set a target of 90% financial inclusion by the year 2020. This target was almost achieved in 2016 where 89% were financially included but only 26% have accounts with commercial banks. This study reveals that all the three dimensions of financial inclusion i.e. access, penetration and usage of commercial banks have increased from 2004 to 2016. This research found that almost 40% of respondents have accounts in the commercial bank. The rest of respondents have accounts either in microfinance institutions or in SACCOs. The findings show again that 67.7% of people who took loans, took them from commercial banks. Although commercial banks play a great role, there is a long way to go for Rwanda to be formally included because only 26% have an account in commercial banks according to Finscope Survey 2016. On this matter, the government of Rwanda should put more efforts to computerize MFIs and SACCOs as they serve 65% of the population in Rwanda. The government of Rwanda should set policies that support microfinance and SACCOs for them to offer better services at the standards of commercial banks as this would help in having a big number of citizens formally included and it may contribute to its economic growth.

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Abdallah, Abdul-Hanan. "Does credit market inefficiency affect technology adoption? Evidence from Sub-Saharan Africa." Agricultural Finance Review 76, no. 4 (November 7, 2016): 494–511. http://dx.doi.org/10.1108/afr-05-2016-0052.

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Purpose The purpose of this paper is to investigate factors affecting the adoption of agricultural technologies in Sub-Saharan Africa, specifically the role of credit market inefficiency in adoption of agricultural technologies in the region. Design/methodology/approach Most importantly, the paper applies a 2SLS model on a unique data set on nine agrarian countries from Sub-Saharan Africa’s intensification of food crops agriculture (Afrint) to provide evidence on how credit market inefficiency affects adoption of technologies in the sub region. Findings The study finds that the relationship between credit and technology adoption is one-way causal relation (i.e. credit access leads to technology adoption) as opposed to a two-way relation (i.e. mutual dependent relation). Further, the results indicate that credit market inefficiency can be a major barrier to the adoption of yield enhancing technologies in Sub-Saharan Africa. Further, the study showed mixed results for household variables. The results give credence to studies that highlight the importance of infrastructure and risk control in the adoption of new technologies. Research limitations/implications The study is limited to only nine countries in Sub-Saharan Africa. Thus, the findings and interpretations should be considered as such. Further, there is the need for further research that considers all the region so as to establish whether or not there is a relationship between credit market inefficiencies and technology adoption in the region. Practical implications The policy implication is that microfinance institutions should consider scaling up their credit services to ensure that more households benefit from it, and in so doing technology adoption will be enhanced. Originality/value The main contribution of the study lies in its use of a unique data set from Sub-Saharan Africa’s intensification of food crops agriculture (Afrint) to investigation relationship between credit market inefficiency and technology adoption.

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Koob, Michael. "Mikrofinanzierungen." Der Betriebswirt: Volume 51, Issue 3 51, no. 3 (September 30, 2010): 17–22. http://dx.doi.org/10.3790/dbw.51.3.17.

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Mikrofinanz hat sich zu einem entwicklungspolitischen Schlagwort ausgebildet. In der Entwicklungszusammenarbeit gilt die Vergabe von Kleinstkrediten seit langem als Erfolgsmodell. Was steckt hinter diesem durch den Friedensnobelpreisträger Muhammad Yunus bekannt gewordenen Instrument? Wie sieht die Praxis in den Entwicklungsländern aus? Gibt es für Mikrofinanzierungen auch einen Markt in den entwickelten Ländern. Microfinance has raised high expectations regarding poverty alleviation in the developing countries. Lack of empirical evidence has not, however, diminished the enthusiasm of the proponents of microfinance. The perception that microfinance plays an important role in poverty alleviation has attracted substantial assistance from international donors and local governments. What are the instruments and tools for implementing microfinance successfully in a country? What are the challenges? We have chosen Uganda in East Africa as a good example to see the lessons learnt in microfinance. Even in the industrialized world microfinance plays a more and more important role in the financial sector for customers and institutional investors. Keywords: mikrofinanzierungen, microfinances

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Sarwosri, Arieska Wening, Ulf Römer, and Oliver Musshoff. "Are African female farmers disadvantaged on the microfinance lending market?" Agricultural Finance Review 76, no. 4 (November 7, 2016): 477–93. http://dx.doi.org/10.1108/afr-02-2016-0012.

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Purpose The purpose of this paper is to examine whether social and/or cultural obstacles faced by African female farmers diminish their accessibility to lending opportunities provided by a commercial microfinance institution; and affect their repayment performance. Design/methodology/approach The underlying data set is comprised of information regarding 9,710 farmers from Madagascar and was provided by the AccèsBanque Madagascar. Logit and Tobit models are applied to determine gender effects on loan accessibility and repayment performance, respectively. Findings Even though female farmers are associated with a lower repayment performance, they have a higher rate of loan application approval compared to male farmers. Research limitations/implications The results are limited to Madagascar and other African countries with similar socio-economic conditions. Social implications Commercial microfinance institutions still provide access to credit for disadvantaged groups, such as female farmers. Originality/value To the best of the authors’ knowledge, this is the first study investigating gender-specific credit access and repayment performance of rural African farmers using a data set from a commercial microfinance institution without a social mission for females.

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Journal articles on the topic 'Microfinance institutions – Africa'

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