Header

UZH-Logo

Maintenance Infos

Outreach and performance of microfinance institutions: the importance of portfolio yield


Meyer, Julia (2019). Outreach and performance of microfinance institutions: the importance of portfolio yield. Applied Economics, 51(27):2945-2962.

Abstract

In this paper, we examine the interaction between social outreach and financial return in microfinance. Running multivariate regression models and using 1,805 observations of microfinance institutions between 2004 and 2013, we find strong evidence suggesting that institutions with more social engagement – in terms of outreach to the poor – earn higher portfolio yields. We also find that measures of outreach are associated with increased operating expenses. As return figures are influenced by both costs and yield, and because both increase to a similar degree with the depth of outreach, these two effects lead to a zero sum result on return measures. This finding could explain why existing studies assessing the interaction between social outreach and different measures of financial performance in microfinance (such as return on assets/equity, operating expenses, operational self-sufficiency) have not produced consistent results.

Abstract

In this paper, we examine the interaction between social outreach and financial return in microfinance. Running multivariate regression models and using 1,805 observations of microfinance institutions between 2004 and 2013, we find strong evidence suggesting that institutions with more social engagement – in terms of outreach to the poor – earn higher portfolio yields. We also find that measures of outreach are associated with increased operating expenses. As return figures are influenced by both costs and yield, and because both increase to a similar degree with the depth of outreach, these two effects lead to a zero sum result on return measures. This finding could explain why existing studies assessing the interaction between social outreach and different measures of financial performance in microfinance (such as return on assets/equity, operating expenses, operational self-sufficiency) have not produced consistent results.

Statistics

Citations

Dimensions.ai Metrics
5 citations in Web of Science®
4 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

28 downloads since deposited on 22 Feb 2019
24 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Language:English
Date:9 June 2019
Deposited On:22 Feb 2019 09:53
Last Modified:01 Aug 2020 00:00
Publisher:Taylor & Francis
ISSN:0003-6846
OA Status:Green
Publisher DOI:https://doi.org/10.1080/00036846.2018.1564016
Other Identification Number:merlin-id:17329

Download

Green Open Access

Download PDF  'Outreach and performance of microfinance institutions: the importance of portfolio yield'.
Preview
Content: Published Version
Language: English
Filetype: PDF
Size: 1MB
View at publisher