The Double Bottom Line Commitment  And Microfinance Sustainability in Pakistan

Saad, Muhammad; Bhuiyan, Abul Bashar; Taib, Hasniza Mohd

doi:10.26650/b/ss10.2020.017.09

Cited by 2 publications

(4 citation statements)

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“…, 2021)). An index of technical variables has been developed from the initially avaiable variables in accordance with Saad et al. (2019).…”

Section: Methodsmentioning

confidence: 99%

“…Factor analysis is used to determine the components of principal component analysis (PCA) to examine the similarities in data series (Asteriou and Price, 2001 as cited in (Hussain et al, 2021)). An index of technical variables has been developed from the initially avaiable variables in accordance with Saad et al (2019). The financial sustainability index is developed based on the loading of the variables.…”

Section: Measurement Of Variablesmentioning

confidence: 99%

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Nexus between good governance and financial sustainability: evidence from microfinance sector of India

Maeenuddin,

Hamid,

Nassir

et al. 2024

JFEP

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Purpose Microfinance emerged as an essential catalyst for socio-economic development and financial inclusion to reduce poverty. Microfinance institutions cannot meet their primary objective of poverty reduction if they are not sustainable financially. With the theoretical support of profit incentive theory, this paper aims to investigate the impact of organizational structure (OS), growth outreach (average loan per borrower [ALPB] and number of active borrowers), women empowerment (percentage of women borrowers [PWB]), liquidity, leverage and cost efficiency (cost per borrower) on the financial sustainability of microfinance providers (MFPs) in India and explore the possible moderating effect of the national governance indicators (NGIs). Design/methodology/approach A financial sustainability index has been developed by using principal components analysis, including both conventional measures (return of assets and return on equity) and efficiency measures (operational self-sufficiency and financial self-sufficiency). Due to the existence of endogeneity and heteroskedasticity, this study uses two-step system generalized method of moments estimates to examine the relationships for a period of 2006 to 2018. Findings The finding reveals that there is a strong significant relationship between financial sustainability and its influential factors. Organizatioanl Structure, loan size, women borrowers, Gross Domestic Products and inflation enhance the financial sustainability of India’s microfinance sector. However, a number of borrowers, liquidity, leverage and operating costs negatively affect the financial sustainability of MFPs of India. The estimates demonstrate that NGIs significantly moderate the association between financial sustainability and its influential factors. The NGIs negatively affect the positive impact of Organizatioanl Structure on financial sustainability. National governance increases the positive effect of loan size (ALPB) and reduces the negative effect of a number of borrowers and leverage on the financial sustainability of MFPs of India. However, NGIs negatively affect the positive relationship between Percentage of Women Borrowers and Financial sustainability of Microfinance Providers of India. Originality/value To the best of the authors’ knowledge, this study is the first of its kind that incorporates all of the six dimensions of the National Governance Indicators (NGIs) and uses as a moderator. Secondly, a financial sustainability index has been developed for measuring the financial sustainability of Microfinance Providers (MFPs).

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“…, 2021)). An index of technical variables has been developed from the initially avaiable variables in accordance with Saad et al. (2019).…”

Section: Methodsmentioning

confidence: 99%

Section: Measurement Of Variablesmentioning

confidence: 99%

Nexus between good governance and financial sustainability: evidence from microfinance sector of India

Maeenuddin,

Hamid,

Nassir

et al. 2024

JFEP

View full text Add to dashboard Cite

show abstract

“…Principal Components Analysis (PCA) has to be used, and weights will be assigned to the indicators based on their importance in developing the index. PCA is a multi-variable statistical tool that helps reveal information quickly by using a complex set of indicators (Saad et al, 2021;Saad et al, 2019). Ratios proposed for the development of the financial sustainability index include:…”

Section: Methodsmentioning

confidence: 99%

“…It provides a means for identifying unobserved common factors, i.e., financial sustainability, using a combination of the linearly independent variables in this study. Based on the study of (Saad et al, 2021), the objective is to develop a mix of technical variables out of the initially available variable. The financial sustainability index will be developed based on the loading of the variables.…”

Section: Principal Components Analysis (Pca)mentioning

confidence: 99%

Developing an Index for the Measurement of Financial Sustainability of Microfinance Providers: A Theoretical Review

2023

Central European Management Journal

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Measurement of financial sustainability is still an unresolved and debatable issue. Utilizing multi-dimensional structures, the Finanical sustainability Index is essential in determining the actual financial position. The capacity of a microfinance institution (MFI) to operate sustainably by offering services to certain populations that traditional financial institutions neglect can be used to define sustainability. This study aims to design an indicator that can gauge a microfinance institution's financial sustainability. Due to the deficiencies of the present sustainability assessment, this paper's main focus is on examining the literature on assessing MFI financial sustainability. Additionally, this study is the first of its type to suggest a thorough index that takes into account both conventional measures (ROA & ROE) and efficiency measures (OSS and FSS) as components of the index. Principal Components Analysis (PCA) has been used to assign weight to the indicators to develop the index. This financial sustainability index will reflect an accurate picture of the operational capability of the MFIs, which can help to reduce poverty and empower women. This index will reflect an accurate picture of the operational and financial health of the MFIs for long-term operation. This study is limited to the financial sustainability of microfinance providers. It can be enhanced to the sustainability index by including others factors such as outreach, institutional and environmental factors.

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The Double Bottom Line Commitment And Microfinance Sustainability in Pakistan

Cited by 2 publications

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Nexus between good governance and financial sustainability: evidence from microfinance sector of India

Nexus between good governance and financial sustainability: evidence from microfinance sector of India

Developing an Index for the Measurement of Financial Sustainability of Microfinance Providers: A Theoretical Review

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