Microfinance Institutions' Mission Drift in Macroeconomic Context. (1st April 2015)

• Record Type: Journal Article
• Authors: Xu, Shufang; Copestake, James; Peng, Xinman
• Is Part Of: Journal of international development. Volume 28:Number 7(2016:Oct.)
• Page Start: 1123
• Page End: 1137
• Publication Date: 2015-04-01
• Subjects: microfinance -- mission drift -- depth of outreach -- financial performance -- social performance -- macroeconomic influences; Economic development projects -- Developing countries -- Periodicals; Developing countries -- Economic policy -- Periodicals; Developing countries -- Foreign economic relations -- Periodicals; Economic development -- Periodicals; 330.91724
• DOI: 10.1002/jid.3097
• Languages: English
• ISSNs: 0954-1748

Abstract

Abstract: We theoretically discuss the potential macroeconomic influences on microfinance institutions' (MFIs') depth of outreach and provide empirical evidence, using panel analysis, to investigate determinants of average loan balance ( ALB ) per borrower as a percentage of gross national income per capita, as a proxy indicator for poverty focus or depth of outreach. ALB is found to be positively associated with operational self‐sufficiency, a finding that is consistent with the mission drift hypothesis. But it is also positively associated with the shares in GDP of net foreign direct investment and domestic credit to the private sector. This suggests mission drift is not only associated with MFI‐specific factors but also influenced by macroeconomic context. Copyright © 2015 John Wiley & Sons, Ltd.