Asymmetric impact of microfinance on economic growth: Evidence from Bosnia and Herzegovina

Smolo, Edib

doi:10.1016/j.heliyon.2023.e22790

Heliyon

2023

DOI: 10.1016/j.heliyon.2023.e22790

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Asymmetric impact of microfinance on economic growth: Evidence from Bosnia and Herzegovina

Edib Smolo

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2024

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Cited by 2 publications

References 37 publications

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The scale effects of agricultural credits, institutional governance and microfinance sustainability in Sub-Saharan African countries

Mba Fokwa

2024

AFR

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PurposeThe study examines the synthesized influences of institutional governance and the scale effects of agricultural credits on the sustainability of microfinance institutions (MFIs) in Sub-Saharan Africa.Design/methodology/approachUsing a sample of 840 MFIs (300 independent and 540 networked), the study applied Generalized Method of Moments (GMM) and Lewbel’s estimator.FindingsResults indicate positive effects of financial structure, efficiency and agricultural credit scale on sustainability, with a non-linear U-shaped relationship between agricultural credit size and microfinance sustainability. Depending on institutional governance quality, a threshold is identified where agricultural credit scale significantly enhances the quality of Portfolio at Risk (lnPAR) in independent MFIs and Returns on Assets (lnROA) in networked MFIs.Research limitations/implicationsStudy suggests strengthening governance for transparency and operating within optimal size for enduring sustainable performance. While focused on Sub-Saharan Africa, future research could expand to various economies or introduce additional variables for a comprehensive analysis.Practical implicationsMFIs can achieve sustainability by implementing management guided by better institutional norms, innovative financial transformations better suited to financing agricultural activities and techniques and an organizational structure more aligned with their performance targets.Social implicationsBroader and more reliable access to financial services, particularly in the agricultural sector, can stimulate production and alleviate poverty.Originality/valueThe study’s originality lies in its contribution to the literature by examining the role of institutional governance in microfinance institution performance and evaluating microfinance in a broader Sub-Saharan African context, proposing threshold limits where agricultural microcredit compromises performance.

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The scale effects of agricultural credits, institutional governance and microfinance sustainability in Sub-Saharan African countries

Mba Fokwa

2024

AFR

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Customers’ Perception of Microfinance Services as a Tool for Rural Development: A Romanian Case Study

Henegar,

Ilieș,

Mureșan

et al. 2024

Agriculture

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Microfinance institutions (MFIs) play a vital role in extending financial services to marginalized and underprivileged populations worldwide. While the focus of MFIs has traditionally been on providing financial products, recent research highlights the importance of intangible factors in shaping their success and sustainability. This research examines the influence of factors such as trust, empathy, organizational culture, and reputation on MFI performance. A structured questionnaire was developed, and data were collected from 110 clients. Statistical analysis, including Cronbach alpha, composite reliability, and exploratory factor analysis, was employed to assess the reliability, validity, and dimensionality of the collected data. Three dimensions of service quality were identified: empathy and assurance, trust, and intangibles. While gender differences in perception were observed, they were not statistically significant. However, significant differences were noted across age groups, educational levels, and types of businesses. Understanding and addressing factors related to trust, intangibles, and specific aspects of service satisfaction are crucial for enhancing client engagement and long-term success. By continuously striving to improve service quality, microfinance companies can strengthen client relationships and position themselves in such a way as to achieve sustainable impact and success in the microfinance landscape.

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Asymmetric impact of microfinance on economic growth: Evidence from Bosnia and Herzegovina

Cited by 2 publications

References 37 publications

The scale effects of agricultural credits, institutional governance and microfinance sustainability in Sub-Saharan African countries

The scale effects of agricultural credits, institutional governance and microfinance sustainability in Sub-Saharan African countries

Customers’ Perception of Microfinance Services as a Tool for Rural Development: A Romanian Case Study

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