Do microfinance institutions benefit from integrating financial and nonfinancial services?
This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and efficiency. The results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach.
Do Powerful CEOs Have an Impact on Microfinance Performance?
In this study we show that Microfinance Institutions (MFIs) with more powerful CEOs have higher performance variability. A powerful CEO is defined as one that also chairs the board of directors. CEO power is reflected in higher performance variability if CEOs have more latitude of action, i.e. managerial discretion. Managerial discretion can be limited by having stakeholder electives on the board. We find that CEO power only has an effect on MFI performance variability when there are no stakeholder electives on the board. Furthermore, we argue that CEOs in non-profit MFIs have more discretion, because their dual mission implies their CEOs are harder to control. We find that CEO power increa…
Do Powerful CEOs Determine Microfinance Performance?
Authors version of an article published in Journal of Management Studies. The definitive version is available from Wiley at: http://dx.doi.org/10.1111/j.1467-6486.2012.01046.x Recently, microfinance has been coming under public and media attacks. The microcredit crisis following from microfinance-induced suicides in 2010 in the Indian state of Andhra Pradesh indicates that weak corporate governance and imprudent risk taking have far-reaching consequences. Yet, analyses of corporate governance mechanisms among microfinance institutions (MFIs) remain underdeveloped. As a response, this study examines the impact of CEO power on MFI risk taking by deriving explicit predictions of this effect fr…
Do Powerful CEOs Determine Microfinance Performance?
Recently, microfinance has been coming under public and media attacks. The microcredit crisis following from microfinance-induced suicides in 2010 in the Indian state of Andhra Pradesh indicates that weak corporate governance and imprudent risk taking have far-reaching consequences. Yet, analyses of corporate governance mechanisms among microfinance institutions (MFIs) remain underdeveloped. As a response, this study examines the impact of CEO power on MFI risk taking by deriving explicit predictions of this effect from a characterization of the microfinance industry. Based on a sample of 280 microfinance institutions, our results suggest that powerful CEOs of microfinance non-governmental …