Banks and Microbanks
68 Pages Posted: 6 Sep 2013
There are 2 versions of this paper
Banks and Microbanks
Date Written: February 7, 2013
Abstract
We combine two datasets to examine whether the scale of an economy’s banking system affects the profitability and outreach of microfinance institutions. We find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks that rely on commercial-funding, use traditional bilateral lending contracts (rather than group lending methods favored by microfinance NGOs), and take deposits. We consider plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment, but we fail to find strong support for these alternative hypotheses.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Microfinance Institutions and Public Policy
By Daniel Hardy, Paul Holden Holden, ...
-
Outreach and Efficiency of Microfinance Institutions
By Niels Hermes, Robert Lensink, ...
-
Performance and Corporate Governance in Microfinance Institutions
By Roy Mersland and R. Øystein Strøm
-
Financial Development and the Efficiency of Microfinance Institutions
By Niels Hermes, Robert Lensink, ...
-
The Cost of Ownership in Microfinance Organizations
By Roy Mersland
-
Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?
By Robert Cull, Asli Demirgüç-kunt, ...
-
By Beatriz Armendariz and Marc Labie
-
Microfinance Tradeoffs: Regulation, Competition, and Financing
By Robert Cull, Asli Demirgüç-kunt, ...
-
Does Microfinance Regulation Curtail Profitability and Outreach?
By Robert Cull, Asli Demirgüç-kunt, ...