Search results

The purpose of this study is to explore the interplay among self-organization, networks and sustainable innovations within microfinance institutions (MFIs) and to examine the extent to which organizational resilience plays a significant role in shaping these dynamics as a mediator.

This paper adopted a cross-sectional research design combined with analytical and descriptive approach to collect the data. Smart partial least squares structural equation modeling (PLS-SEM) was used to construct the measurement model and structural equation model to test the mediating effect under this study.

The results revealed that organizational resilience is a significant mediator in the relationship between self-organization, networks and sustainable innovations among microfinance institutions in Uganda.

The data for this study were collected only from microfinance institutions in Uganda. Future studies may collect data from other formal financial institutions like commercial banks and credit institutions to test the mediating effect of organizational resilience. More still, the study adopted only a single approach of using a questionnaire. However, future research through interviews may be desirable. Likewise this study was cross-sectional in nature. Therefore, a longitudinal study may be useful in future while investigating the mediating role of organizational resilience traversing over a long time frame.

A possible implication is that microfinance institutions which desire to have sustainable innovative solutions for their business operations in disruptive circumstances may need to scrutinize their capacity to be resilient and self-organize.

Microfinance institutions play a great role to the underserved clients. Thus, for each to re-organize to be able to provide services that meet users’ needs, without physical products so as to ensure long-term financial and social welfare combined with the ability to bounce back and adapt in times of economic downturn to avoid mission adrift.

While most studies have been carried out on organizational resilience, this paper takes center stage and is the first to test the mediating role of organizational resilience in the relationship between self-organization, networks and sustainable innovations, especially in microfinance institutions in Uganda. This paper generates strong evidence and contributes to the powerful influence of organizational resilience in enhancing the level of sustainable innovations based on self-organization and networks.

The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission.

This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information.

The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives.

The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study.

This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.

The purpose of this paper is to understand interest-free microfinance practices in India, identify issues and recommend possible solutions.

To achieve the proposed objectives, Bait-un-Nasr (BuN) Urban Cooperative Credit Society, located in Mumbai, India, is considered for the case study. The study is based on both primary and secondary data. The primary data are collected through questionnaires and secondary data from various sources. Performance of the institution is assessed in terms of growth and sustainability indicators.

It is found that BuN has been successful in providing interest-free microfinance services in India. A few operational issues have been highlighted and possible solutions are recommended. Moreover, it is found that in comparison to the microfinance industry standards, the performance of BuN has been lower.

BuN is evaluated from only growth and sustainability aspects and not from the aspect of the socio-economic impacts of its services on the lives of customers.

This study would become a documented source of interest-free microfinance practices in India. Moreover, the recommendations provided, if implemented, would help BuN in further growth and development.

This study would help create awareness in the society about the practices of interest-free microfinance.

This paper highlights the interest-free microfinance practices in India that have not received the needed attention. The paper also attempts to identify key issues pertaining to interest-free microfinance with possible solutions.

This paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).

The study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.

The study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.

The findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidies

Unlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.

With the ongoing transformation of the microfinance sector, questions have been raised on the ability of microfinance institutions (MFIs) to perform financially well without compromising with their social objectives. The current study attempts to analyse the social and financial performance of Indian MFIs with an objective to find the kind of relationship between these two objectives.

The dynamic framework of simultaneous equations model is used to find the nature of the relationship which exists between social and financial performance of Indian MFIs.

The study finds that depth of outreach enables MFIs to achieve financial sustainability. On the other hand, financially strong MFI lend more as reflected by an increase in their average loan size.

Many MFIs still receive subsidies to support their operations. Ideally, adjustments should be made to remove the effect of such subsidies on their cost. However, due to non-availability of data, the study fails to make any adjustment for the subsidies.

The presence of a complementary relationship between social and financial performance in the Indian microfinance sector is quite encouraging for the policymakers during the current time when the sector is becoming less dependent on subsidies. However, the recent upsurge in the average loan size requires attention.

The findings suggest that MFIs can achieve financial sustainability while targeting poor clients. This indicates that MFIs can perform socially good along with their financial performance.

Such study is vital when the Indian microfinance sector is moving away from subsidies to become self-reliant and commercialised. Few studies have focused on this aspect of Indian microfinance sector.

Bringing more impact seems to be a real issue for social initiatives and organizations requiring the adoption of new approaches. The paper aims to define an integrated approach for building, maintaining and upgrading Islamic social finance and sustainable ecosystems.

The paper presents a conceptual framework based on case studies and literature review describing the methodology and the necessary steps to build sustainable ecosystems.

The paper shows the impact of building social finance ecosystems on tackling social issues. It emphasizes the idea that solving social issues is everybody’s business – from governments to businesses – and that those initiatives require sufficient Sharīʿah-compliant funding to achieve sustainability goals.

The paper does not focus on the Islamic world experiences in building ecosystems serving social causes.

The paper gives an overview on how collaboration between the different social oriented organisations can enhance the social impact of the different initiatives. The aim is to ensure adequate financing to all the ecosystem components during the whole lifecycle.

The suggested approach of building sustainable ecosystems can serve as a way to assess the existing social initiatives and practices to find relevant combinations targeting more impact.

In the social sphere, the idea of building ecosystems has been explored in different ways but never in a way that gathers all the components including finance providers, coordinators and the different types of initiatives. The paper adapts the ecosystem concept to the Islamic finance specificities.

This study investigates the effectiveness of microfinance-backed entrepreneurship as a mechanism for the holistic empowerment of women.

This study employs a mixed-method research-design consisting of quasi-experimental design (quantitative approach) involving women, both entrepreneurs (132) and non-entrepreneurs (238), as well as in-depth semi-structured interviews (qualitative approach).

Quantitative analysis revealed that female entrepreneurs are better off than female non-entrepreneurs in terms of economic, social, political and psychological indicators of empowerment. However, relatively lesser impact was found in terms of political, and to an even smaller extent, social empowerment of women. Analysis of in-depth interviews corroborated these findings confirming that entrepreneurship serves as an effective tool for the holistic empowerment of women. However, non-entrepreneurs also exhibit social empowerment.

Given the restricted geographical ambit of the study, prudence ought to be exercised in drawing inferences applied to alternate contexts. That the vast majority of questionnaire respondents are illiterate presented a notable impediment in the process of collection of accurate responses.

Microfinance intervention ought to be specifically directed to cultivating entrepreneurship among women; in particular, to achieve the full benefits of empowerment, women availing microfinance ought to exert full control over their own business ventures.

In analyzing holistic empowerment through microfinance supported businesses set up by women, the study adds to the existing literature on women entrepreneurship and empowerment.

The study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).

Data for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.

Reported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.

For policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.

The approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

Farmers are the largest group of financially excluded persons in Nigeria, thereby highlighting the supply shortfall in finance to agriculture in Nigeria. Availability of finance would go a long way in improving output and productivity in agriculture, and consequently help in reducing poverty. This study conducts an empirical investigation of the effects of financial inclusion on agricultural productivity in Nigeria.

This study makes use of the Living Standards Measurement Study–Integrated Surveys on Agriculture (LSMS-ISA). This is a new data set on agricultural households which contains information on agricultural activities and various household activities, including banking, savings and insurance behaviour. Considering the data are such that there are observations for households over three time periods, the study exploits the time series and cross-section dimension of the data by using panel data estimation.

The empirical results of the study show that financial inclusion, irrespective of how it is measured, has exerted positive and statistically significant effects on agricultural productivity in Nigeria.

While considerable research has been conducted to examine how finance affects broad macroeconomic aggregates, little is known about the effects of finance at the household and individual level. It is important to explicitly account for financial inclusion when examining the effects of finance on individuals and households. This study improves on existing research and offers new insights into the effects of financial inclusion on the economic activities of agricultural households in Nigeria.

The purpose of this study is to evaluate the effect of some internal features that influence the efficiency of non-bank financial institutions (NBFIs) in Bangladesh.

The study selected the top 15 Dhaka Stock Exchange (DSE)-listed NBFIs according to purposive sampling. The study period was from 2016 to 2020. Secondary data were collected from annual reports. The cost-to-income ratio was a dependent variable that was used as a proxy of operational efficiency. The ordinary least square regression technique was applied to measure the impact of firm-specific factors on efficiency.

Results showed that number of employees, branch number, firm size and deposit ratio have a significant effect on efficiency at 5% level. The number of branches and employees showed a negative impact, whereas firm size and deposit ratio showed a positive effect on the firms' efficiency. The deposit ratio is negatively related because deposit interest expenses were more than offset by interest income generation through the conversion of deposits into loans.

The study has practical and policy implications on NBFIs' managers, employees, shareholders, depositors, clients, regulatory authorities and government as efficiency enhancement would bring financial soundness.

This study shed light on some firm-specific factors that can be changed to increase operational efficiency or reduce the cost-to-income ratio. The novelty of the study is that it identified some significant associations between firm-specific factors and the operational efficiency of NBFIs.