The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions

Detalhes bibliográficos
Autor(a) principal: Mata, Mário Nuno
Data de Publicação: 2023
Outros Autores: Shah, Sayyed Sadaqat Hussain, Sohail, Nida, Batista, Anabela
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.21/16066
Resumo: Artigo publicado em revista científica internacional
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spelling The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutionsMicro financial institutions;Emerging markets and developing economiesSustainabilityDevelopment financial institutionsStochastic frontier analysisCobb Douglas production functionMarket riskArtigo publicado em revista científica internacionalThe Micro Financial Institutions (MFIs) have been touted as development strategies for Emerging Markets and Developing Economies (EMDEs) which merits research into the effect of financial development on the efficiency and sustainability of the MFIs. The Efficient and sustainable MFIs significantly paved the way for the economic development of a country particularly in developing countries. Surprisingly there are very rare studies that examine the nexus of financial development, MFIs efficiency, and sustainability. Also, these studies are confined to the impact of financial development either on the efficiency or sustainability of MFIs. Addressing this gap, the study attempts to explore the country-specific and MFIs-specific factors which significantly affect the efficiency and sustainability of the MFIs. For this purpose, the study first determines whether financial development contributes to the efficiency and sustainability of MFI. Secondly, the effect of MFIs’ specific characteristics such as credit risk, market risk, liquidity risk, lending strategy, Development Financial Institutions (DFIs) funds management, financial outreach, and poverty alleviation on the efficiency and sustainability of MFIs. The study has been conducted for Bangladesh, India, and Pakistan consisting of a panel data set of 12 MFIs over a period spanning from 2008–2018 using Stochastic Frontier Analysis and Cobb Douglas production function regression analysis. Overall empirical analysis reveals that financial development has significantly affected the efficiency and sustainability of the MFIs. While specific characteristics such as poverty alleviation and DFIs funds management have been shown to improve MFIs efficiency whereas an increase in credit risk, lending strategy, and market risk decrease MFIs sustainability and liquidity risk along with an increase in financial outreach leads to a decrease in MFIs efficiency. The directions and magnitudes of the findings suggest the stakeholders for all three countries for the significant direction leads to the efficiency and sustainability of MFIs. Moreover, future research could strive to understand the aspects of financial development which negatively correlate with the MFIs’ efficiency and sustainability such as stringent tax policies, creditor rights protection, and implementation of rules and regulations.MDPIRCIPLMata, Mário NunoShah, Sayyed Sadaqat HussainSohail, NidaBatista, Anabela2023-05-17T16:15:44Z2023-01-112023-01-11T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.21/16066engMata, M. N., Shah, S. S. H., Sohail, N., & Correia, A. B. (2023). The Effect of Financial Development and MFI’s Characteristics on the Efficiency and Sustainability of Micro Financial Institutions. Economies, 11(3), 78. https://doi.org/10.3390/economies11030078https://doi.org/10.3390/economies11030078info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-08-03T10:14:20Zoai:repositorio.ipl.pt:10400.21/16066Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T20:23:40.167812Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
title The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
spellingShingle The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
Mata, Mário Nuno
Micro financial institutions;
Emerging markets and developing economies
Sustainability
Development financial institutions
Stochastic frontier analysis
Cobb Douglas production function
Market risk
title_short The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
title_full The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
title_fullStr The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
title_full_unstemmed The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
title_sort The effect of financial development and MFI’s characteristics on the efficiency and sustainability of micro financial institutions
author Mata, Mário Nuno
author_facet Mata, Mário Nuno
Shah, Sayyed Sadaqat Hussain
Sohail, Nida
Batista, Anabela
author_role author
author2 Shah, Sayyed Sadaqat Hussain
Sohail, Nida
Batista, Anabela
author2_role author
author
author
dc.contributor.none.fl_str_mv RCIPL
dc.contributor.author.fl_str_mv Mata, Mário Nuno
Shah, Sayyed Sadaqat Hussain
Sohail, Nida
Batista, Anabela
dc.subject.por.fl_str_mv Micro financial institutions;
Emerging markets and developing economies
Sustainability
Development financial institutions
Stochastic frontier analysis
Cobb Douglas production function
Market risk
topic Micro financial institutions;
Emerging markets and developing economies
Sustainability
Development financial institutions
Stochastic frontier analysis
Cobb Douglas production function
Market risk
description Artigo publicado em revista científica internacional
publishDate 2023
dc.date.none.fl_str_mv 2023-05-17T16:15:44Z
2023-01-11
2023-01-11T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.21/16066
url http://hdl.handle.net/10400.21/16066
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Mata, M. N., Shah, S. S. H., Sohail, N., & Correia, A. B. (2023). The Effect of Financial Development and MFI’s Characteristics on the Efficiency and Sustainability of Micro Financial Institutions. Economies, 11(3), 78. https://doi.org/10.3390/economies11030078
https://doi.org/10.3390/economies11030078
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv MDPI
publisher.none.fl_str_mv MDPI
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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