Profiting from Poverty? A Case Study of UK based Microfinance Institutions

Navin, Nitin

doi:10.17492/mudra.v2i2.9661

Cited by 2 publications

(3 citation statements)

References 10 publications

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“…For many of them, providing financial services has been just a means to achieve their social objectives. Many NGOs in African countries have registered themselves as 'profit making entity' in order to provide microfinance services to the poor (Navin, 2015). 3.…”

Section: Discussionmentioning

confidence: 99%

Market Structure and Competition in the Indian Microfinance Sector

Navin¹,

Sinha

2019

Vikalpa: The Journal for Decision Makers

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Executive Summary The Indian microfinance sector has experienced fundamental changes in the structure of ownership and management of microfinance institutions (MFIs). The current study seeks to evaluate the competition level of the Indian microfinance sector during the period 2005–2017 and attempts to find the cause-and-effect relationship between concentration and competition. Furthermore, it analyzes the performance of leading MFIs to explore if there is evidence of exploitation of clients by these institutions. The study is the first of its kind with explicit focus on the market structure of the Indian microfinance market. The study uses unbalanced panel data sets generated from the microfinance information exchange (MIX) data source. The representative sample includes firm specific data of 127 MFIs of different legal statuses and sizes. The dynamic equation model is estimated applying the difference generalized methods of moments (GMM). The results of the empirical investigation find a rise in the concentration with a decrease in competition in the Indian microfinance market during recent years. Intense competition in the past and introduction of new regulations in the wake of sectoral crisis are responsible for this transition. High concentration gives large MFI market powers to exploit the customers. However, the study fails to find any evidence of any such exploitation from the conduct of the leading MFIs. The survey highlights the potential connection between the drop in the competitiveness of the sector and the first appearance of new regulations in light of the sectoral crisis. It is imperative that regulators keep a tight vigil on the operations of leading MFIs and take necessary actions to ensure a healthy competitive environment in the sector. Furthermore, existing rules should be modified to help small MFIs as they play a very crucial role in the fulfilment of the primary objective of the microfinance.

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Section: Discussionmentioning

confidence: 99%

Market Structure and Competition in the Indian Microfinance Sector

Navin¹,

Sinha

2019

Vikalpa: The Journal for Decision Makers

Self Cite

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“…SMEs are expected to improve their financial performance by gaining access to loans. Increasing the efficiency of small businesses by providing them with modest loans that aren't available from traditional lenders is the primary goal of microcredit (Navin, 2015). Some people think that if the poorest Americans, who live just below or just above the federal poverty line, have less access to loans, small businesses and the economy as a whole could suffer.…”

Section: Micro-creditmentioning

confidence: 99%

“…The expansion of small and medium-sized firms (SMEs) in Kenya might be attributed to savings, according to a study by Xalane and Salleh (2019). Micro savings and the success of small businesses were examined in research by Navin (2015). According to the findings, there is a strong link between small-business growth and micro-savings.…”

Section: Micro-savingmentioning

confidence: 99%

Impact assessment of Islamic microfinance on small and medium-sized enterprises in Mogadishu, Somalia

Mohamud,

Mohamud

2023

Int. j. adv. appl. sci.

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Small and medium-sized enterprises (SMEs) play an increasingly vital role in the economic advancement of nations. Nonetheless, these enterprises often face challenges in accessing formal external funding channels. The emergence of Islamic microfinance presents a potential solution to alleviate the financial constraints confronting SMEs. Given the primary mission of Islamic microfinance institutions (MFIs) to uplift the socio-economic status of the underprivileged, it becomes imperative to scrutinize their influence on SME growth. This study aims to ascertain the effects of Islamic microfinance on SMEs in Mogadishu, Somalia. Employing a systematic random sampling method, a carefully selected sample of 100 SMEs was determined. A structured survey framework was developed to collect data, and data analysis was conducted using the Statistical Packages for the Social Sciences (SPSS). The study reveals that micro-savings significantly contribute to SME augmentation, with comparatively limited impact from micro-insurance. While many SMEs benefit from Islamic microfinance, there is a shortfall in the attainment of required funding among beneficiaries. This research sheds light on concerns related to borrower defaults, pre-financing screening deficiencies, resource inadequacy, and the absence of governmental and donor support in Islamic microfinance institutions. The implications extend to future research opportunities, emphasizing the need for governmental and stakeholder efforts to streamline financing acquisition from MFIs by relaxing collateral requirements for SME borrowers.

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Profiting from Poverty? A Case Study of UK based Microfinance Institutions

Cited by 2 publications

References 10 publications

Market Structure and Competition in the Indian Microfinance Sector

Market Structure and Competition in the Indian Microfinance Sector

Impact assessment of Islamic microfinance on small and medium-sized enterprises in Mogadishu, Somalia

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