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Article
Publication date: 29 November 2018

Halima Begum, A.S.A. Ferdous Alam, Md Aslam Mia, Faruk Bhuiyan and Ahmad Bashawir Abdul Ghani

Though microfinance has been working for many years as a tool to eradicate poverty from its root, most of the least developed and developing countries are yet to…

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Abstract

Purpose

Though microfinance has been working for many years as a tool to eradicate poverty from its root, most of the least developed and developing countries are yet to significantly alleviate it from the society. The purpose of this paper is to focus on Shariah-based microfinance products in the context of sustainable poverty alleviation approach and provide them financial benefits to enhance their livelihoods.

Design/methodology/approach

Here, this qualitative study critically analyzes the basics of the sustainable Islamic microfinance to exterminate the level of poverty.

Findings

Islamic microfinance is a more ethical practice than the traditional motives of profit maximization, and it encourages extending the time of repayment if the debtors are in hardship. In some case, it suggests to give charity if the creditor has capability.

Research limitations/implications

Most importantly, research scholars and experts have already criticized the concept of conventional microfinance on the basis of various points, especially for its high rate of interest.

Social implications

Islamic microfinance is provided with a view to fulfill two tools simultaneously, i.e., social and financial inclusion. In this case, credits and Zakah can be given to the extreme poor people for satisfying basic needs. In terms of social responsibility, Islam encourages the people to be soft in case of collecting the lending money.

Originality/value

The study discoursed that sustainable Islamic Microfinance (IM) may be a promising future option to draw the attention of the religiously sensitive people toward the Shariah-based microfinance which can, in turn, mitigate the poverty level.

Details

Journal of Economic and Administrative Sciences, vol. 35 no. 3
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 11 March 2022

Md Aslam Mia, Gary John Rangel, Mohammad Nourani and Rajesh Kumar

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study…

Abstract

Purpose

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study decomposed the efficiency measure into three divisions, namely operational, financial sustainability and social outreach. Subsequently, the authors identified factors affecting these efficiencies in the second stage regression analysis.

Design/methodology/approach

This study employed the network data envelopment analysis approach to evaluate each division of efficiency of 90 MFIs from 2013 to 2018 and used second-stage regression techniques (Tobit and Truncated) to examine the effect of institutional factors.

Findings

The authors’ efficiency analysis revealed that financial sustainability and social outreach were responsible for the low overall efficiency. The second stage analysis revealed the negative influence of institutional factors such as efficiency wage (particularly among small MFIs) on financial sustainability, social outreach and overall efficiencies. Staff turnover reduced operational, financial and overall efficiencies, particularly for large MFIs. The presence of female board members and staff improved the efficiency of MFIs, thus highlighting the pivotal role of women in the success of MFIs. Besides, the effects of regional location of MFIs, regulation and legal status on efficiencies were further discussed.

Originality/value

The study has uniquely evaluated three different types of efficiency in MFIs and employed conventional techniques for the second-stage regression to identify the determinants of efficiency. The findings will enable managers to make appropriate decisions to enhance their organisational efficiency.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 8 December 2022

Md Aslam Mia, Tanzina Hossain, Zinnatun Nesa, Md Khaled Saifullah, Rozina Akter and Md Imran Hossain

Considering the existing evidence on the impact of female board members on the default risks of an organization, the purpose of this study is to investigate the effect of…

Abstract

Purpose

Considering the existing evidence on the impact of female board members on the default risks of an organization, the purpose of this study is to investigate the effect of board gender diversity, alongside institutional characteristics and macroeconomic factors, on the financing costs of microfinance institutions (MFIs).

Design methodology approach

This study collected unbalanced panel data of 1,190 unique MFIs between 2010 and 2018 from the World Bank. The collected data, which covers a total of 95 developing and emerging countries, was thereafter analyzed using the pooled ordinary least squares and random effects model. To overcome endogeneity and omitted variable bias (e.g. time-invariant variables), the authors have also used the generalized method of moments and fixed effects model, respectively. Different proxies of board gender diversity and sub-sample analysis by regions were further undertaken to examine the robustness of the obtained results.

Findings

The findings of this study revealed that board gender diversity has a statistically significant negative effect on the financing costs of MFIs. This suggests that a gender-diverse board can generate cheaper funding for MFIs by minimizing their default risks through effective monitoring and strategic management. Furthermore, the negative impact of board gender diversity on financing costs appears to be more pronounced when there is a minimum of two female board members in the boardroom of MFIs. The results of this study remain consistent and valid regardless of alternate model specifications (e.g. sub-sample analysis, use of alternative proxies of board gender diversity and application of different estimators) and endogeneity issues. Ultimately, the findings in this study reiterate the importance of promoting and implementing gender diversity in the boardroom to minimize the financing costs of MFIs.

Originality value

This study investigated the relationship between board gender diversity and financing costs of MFIs by using relatively recent and global data. The minimum number of female board members required to significantly reduce the financing costs of MFIs was also identified.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 8 February 2022

Isahaque Ali, Md Aslam Mia, Azlinda Azman and Tajul Ariffin Masron

Although microfinance had experienced rapid growth in most developing economies, multiple borrowing remains a growing concern for practitioners and researchers in recent…

Abstract

Purpose

Although microfinance had experienced rapid growth in most developing economies, multiple borrowing remains a growing concern for practitioners and researchers in recent years. Hence, the main purpose of the study is to evaluate the factors affecting multiple borrowing among microfinance clients.

Design/methodology/approach

The primary survey data of 400 microfinance clients from Bangladesh was collected to execute the research objective. Considering the types of dependent variable, this study employed logistics, probit, ordinary least squares (OLS) and Poisson regression techniques to analyze the data.

Findings

Among others, it was discovered that the expected (requested) loan amount is positively associated with multiple borrowing, while the level of training, small cattle farming business and marital status (widow/separated) exhibited negative effects under logistic regression. These results are robust with respect to the regression method, the specification and the definition of the outcome variable. Also, supply-side incentives (e.g. training) were found to partly influence the multiple-borrowing behavior of microfinance clients. These findings reiterate the contribution of both demand and supply-side factors to the multiple-borrowing behavior of clients. Consequently, policy implications and future research direction are advanced.

Originality/value

The authors have examined some individual-level characteristics as well as some supply-side incentives to better understand the underexplored issue of multiple-borrowing behavior among microfinance clients.

Details

Asia-Pacific Journal of Business Administration, vol. 15 no. 1
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 11 June 2018

Md Aslam Mia

The purpose of this paper is to measure and track the evolution of market concentration and competition in the microfinance industry in Bangladesh by employing both the…

Abstract

Purpose

The purpose of this paper is to measure and track the evolution of market concentration and competition in the microfinance industry in Bangladesh by employing both the structural and non-structural measurement techniques.

Design/methodology/approach

By using a unique panel data set generated from the microcredit regulatory authority (MRA) annual reports, the sample includes 169 microfinance institutions (MFIs) and covers the period 2009-2014. The authors employed the Herfindahl-Hirschman index (HHI) and concentration ratio (CR) (largest 3, 8 and 20 MFIs) as structural measurement techniques and the Lerner index as a non-structural measurement technique. In addition, four different market indicators are used as representatives of deposit and credit markets to better explain the evolution of market concentration.

Findings

The results of HHI indicate that the sector is moderately concentrated and currently transitioning to an unconcentrated market. However, based on CR, the industry is still dominated by a few large MFIs. The Lerner index (non-structural approach) also confirmed that the level of competition is relatively high and likely to follow an inverted U-shape during the study period.

Practical implications

The findings of this study will enhance our understanding of the market structure in the Bangladesh’s microfinance industry so as to inform important policy prescriptions. The results also provide impetus to the relatively young MRA to nurture competition in the market; simultaneously, the findings prompt management of the MFIs to cope with a competitive market environment.

Originality/value

This study is one of the first of its kind that includes a large data sample of microfinance market for a single country by employing both structural and non-structural measurement approaches.

Details

International Journal of Social Economics, vol. 45 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 December 2021

Mohammad Nourani, Md Aslam Mia, Md. Khaled Saifullah and Noor Hazlina Ahmad

Uncontrollable brain drain (employees’ turnover) has been found to hamper humanitarian and sustainable objectives of socially oriented organizations. Hence, this study…

Abstract

Purpose

Uncontrollable brain drain (employees’ turnover) has been found to hamper humanitarian and sustainable objectives of socially oriented organizations. Hence, this study aims to explore the roles of gender and organizational-level factors on the rate of employees’ turnover in microfinance institutions (MFIs).

Design/methodology/approach

The study used an unbalanced panel data of 235 MFIs spanning the period 2010–2019. Based on the availability of the required data set on the World Bank catalogue (in collaboration with Microfinance Information Exchange-MIX Market), this study covers four South Asian countries, namely, Bangladesh, India, Pakistan and Sri Lanka. Then, the authors analyzed the data using the conventional panel data regression techniques (e.g. fixed effects model and random effects model).

Findings

The regression results revealed that women leaders (board members) could significantly reduce the employee turnover rate of MFIs. Although the efficiency wage hypothesis is supported in this study, it depends on the profit orientation of the MFIs. This study also confirmed that financial sustainability and donations have helped MFIs to reduce their employees’ turnover, which reiterates the image and brand value effect of MFIs. Moreover, the overall gender development and legal status (e.g. Bank and Non-Bank Financial Institutions) have also been found to have an effect on employees’ turnover based on the sub-sample analysis.

Originality/value

To the best of the authors’ knowledge, the study is among the first to investigate the impact of gender and institutional characteristics on employees’ turnover based on a large and recent panel dataset from selected South Asian countries.

Details

Gender in Management: An International Journal , vol. 37 no. 3
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 9 July 2020

Abu Hanifa Md. Noman, Che Ruhana Isa, Md Aslam Mia and Chan Sok-Gee

This study aims to examine the impact of activity restrictions in shaping the risk-taking behaviour of banks through the channel of competition in different economic conditions.

Abstract

Purpose

This study aims to examine the impact of activity restrictions in shaping the risk-taking behaviour of banks through the channel of competition in different economic conditions.

Design/methodology/approach

The authors use a dynamic panel regression method, particularly a two-step system generalised method of moments to address the risk-taking persistence of banks and endogeneity of activity restrictions and competition with banks’ risk-taking using financial freedom and property rights as instrumental variables. Activity restrictions are computed by constructing an index based on the survey results of Barth et al. (2001, 2006, 2008 and 2013a). Competition is measured by the Panzar–Rosse H-statistic and risk-taking behaviour are measured by non-performing loan ratio and lnZ-score. In the investigation process, the authors control bank characteristics – size, efficiency, ownership and loan composition and macroeconomic factors – gross domestic product growth and inflation, and use 2,527 bank-year observations from 180 commercial banks of Association of the Southeast Asian Nations-five countries over the 1990–2014 period.

Findings

This study finds that activity restrictions exacerbate the risk-taking behaviour of the banks leading to changes in the channel of competition because of the “risk-shifting effect” of competition. The finding is robust by considering the financial crisis and alternative specifications.

Research limitations/implications

This study contributes to bank literature and policy formulation regarding the effect of activity restrictions on the risk-taking behaviour of banks, which is an issue of concern amongst bank regulators, policymakers and academics, especially in the aftermath of the 2008–2009 global financial crisis.

Practical implications

Understanding how the competition plays a role in the relationship between activity restrictions and the risk-taking of banks in different economic situations.

Originality/value

This study provides new insight into the bank literature by investigating the moderating role of competition on activity restrictions and the risk-taking behaviour of banks in a different economic environment.

Details

Journal of Financial Regulation and Compliance, vol. 29 no. 1
Type: Research Article
ISSN: 1358-1988

Keywords

Content available
Article
Publication date: 11 September 2019

Kuperan Viswanathan and Sulaman Hafeez Siddiqui

259

Abstract

Details

Journal of Economic and Administrative Sciences, vol. 35 no. 3
Type: Research Article
ISSN: 1026-4116

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