Suchergebnisse

Séminaire de recherche du LEO ; Microfinance institutions (MFIs) have grown fast in WAEMU surprising political decision makers. They reacted by setting up in the late 90's, a specific legislation. A legal usury rate for credits was defined fixing the borrower ceiling interest rate at 27 percent per year for microfinance institutions and 18 percent for banks. This statutory frame, fast elaborated, revealed early its incapacities and therefore, weakened structures in charge of the regulation of the sector. This structure is confronted with the difficult choice to maintain institutions outside the statutory frame or to apply a rigorous supervision and to precipitate a massive decline of MFIs. This law limits incentives to better governance, the efficiency and the flexibility expected from a good statutory frame. This paper models the behaviour of microfinance institutions in the context of interest rate ceilings and requirement of a minimal level of governance. We use comparative statics to show that a relaxation of the constraint on the usury rate does not lead necessarily to an increase of the borrower interest rate.

Séminaire de recherche du LEO ; Microfinance institutions (MFIs) have grown fast in WAEMU surprising political decision makers. They reacted by setting up in the late 90's, a specific legislation. A legal usury rate for credits was defined fixing the borrower ceiling interest rate at 27 percent per year for microfinance institutions and 18 percent for banks. This statutory frame, fast elaborated, revealed early its incapacities and therefore, weakened structures in charge of the regulation of the sector. This structure is confronted with the difficult choice to maintain institutions outside the statutory frame or to apply a rigorous supervision and to precipitate a massive decline of MFIs. This law limits incentives to better governance, the efficiency and the flexibility expected from a good statutory frame. This paper models the behaviour of microfinance institutions in the context of interest rate ceilings and requirement of a minimal level of governance. We use comparative statics to show that a relaxation of the constraint on the usury rate does not lead necessarily to an increase of the borrower interest rate.

Law Number 1 of 2013 concerning Microfinance Institutions (MFIs) In the transitional provisions of Article 39 Paragraphs (1) and (2) of Law No.1 of 2013 concerning MFIs. it is stated that Baitut Tamwil Muhammadiyah (BTM) is a Microfinance Institution and is required to become an MFI by registering with the OJK. While the Microfinance Institutions owned by Muhammadiyah are not all named Baitut Tamwil Muhammadiyah (BTM) and the legal entity used is a Cooperative and is in the form of KSPPS whose legal basis is Law Number 25 of 1992 concerning Cooperatives and Permenkop and UKM Number 02/2017 concerning Amendments to Permenkop Number 15/2015 concerning Savings and Loans Business and Sharia Financing by Cooperatives.This study aims (1) to find out how the position of the Muhammadiyah Microfinance Institution in the 2 (two) laws and regulations governing the form of cooperatives and (2) to determine the factors that influence the selection of the form of business entity. This research is a normative juridical research. So this research was conducted in libraries by examining primary and secondary materials, as well as interviews with resource persons, in order to support or become additional secondary materials.The results of this study indicate (1) that the position of BTM and LKM Muhammadiyah is legally valid as long as it is subject to the Cooperative Law. Because BTM and LKM Muhammadiyah chose the Cooperative Law and the KSPPS Cooperative Government as their legal basis. However, the obligation to register with the OJK as an LKMS under the MFI Law remains in effect until the rules are revoked or revised. (2) Factors influencing the selection of a Muhammadiyah MFI business entity, either LKMS or KSPPS.

Microfinance targets the poor and very poor, both in urban and rural areas. It has become a common method of poverty alleviation in many developing countries. Several microfinance institutions have adopted a social mission to eradicate poverty by providing credit to the poor. In the past, microfinance organizations used to focus on farmers in rural areas. Modern microfinance programs are focused on the population that is largely neglected by the formal financial sector, specifically women. Due to the perceived risk in this type of uncollateralized lending, private equity markets are not keen on financing microfinance institutions. Furthermore, microfinance institutions are seen as socially motivated as opposed to being financially motivated. For that reason, their profitability and sustainability has come under question in the last decade. Two approaches to the issue of sustainability exist. The dominant institutionist approach argues that microfinance institutions should focus on being sustainable as this will improve their chances of alleviating poverty. The welfarist approach disagrees with this view by arguing that focusing on sustainability will result in the neglect of the poorest of the poor. This study analyses the sustainability of microfinance in South Africa by using a case study research approach. The study explores the challenges to sustainability in South Africa. The results of the study indicate that the microfinance institutions are not profitable nor self- sufficient. The most notable challenge to this sustainability is the high personnel costs. South African MFIs experience higher operating costs than their African counterparts. The study also indicates that the more financially sound microfinance institutions have a lower level of depth outreach than the more subsidy dependent institutions.

"Until recently most microfinance research focused on whether access to finance is beneficial for economically poor entrepreneurs and families. The industry has now grown big and Microfinance Institutions (MFIs) serves hundreds of millions of customers. The business of microfinance is therefore becoming an important research area. While performance and efficiency studies are common in banking research such research on MFI performance is still in its infancy. MFI performance studies are challenging because they are hybrid organizations with dual objectives of serving low-income customers while being financially sustainable. This book contains a collection of new MFI performance research by top scholars from across the globe. A wide range of topics are covered including cash-flow analyses, cultural influence, mission-drift, the influence of public regulation and international actors, group lending, competition, ownership issues, earnings management as well as traditional efficiency studies."--

This paper examines the determinants of return on equity for microfinance institutions (MFI), an important source of funds for entrepreneurs in developing countries. Recent research indicates that MFIs need to become financially sustainable without relying on external funding. To meet this objective, MFIs have begun to look to the capital markets as a source of funds. Our findings indicate that investors in MFIs can look at measures similar to those used by traditional financial institutions, like commercial banks, such as operating expense and portfolio yield measures to measure possible performance of a MFI. MFIs that have a larger percentage of women borrowers fare better. Additionally, we find that country specific macroeconomic conditions affect MFI return.

AbstractWe 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.

The objective of this paper is to investigate the different types of hurdles limiting the growth and development of microfinance institutions operating in Yemen, and to suggest relevant recommendations that be used as a backup in the process of taking remedial measures. The study is both descriptive and analytical in nature. The data collected is based on both primary and secondary sources. The primary data was collected during the field study of ongoing PhD research study on the role of microfinance in mitigating poverty and unemployment in Yemen conducted in October 2015 by Mr. Ali Alshebami. Only a sample of nine MFIs was selected from The MFIs operating in the market, as the remaining MFIs could not be easily reached due to the prevailing persistent internal war situation. A few of these hurdles include but not limited the existence of insufficient funds necessary for financial business and the availability of poor physical infrastructure in the rural areas. In addition, the shortage of qualified human resources, the poor diversification of products and services, the political instability of the country, the wrong perception about lending to the poor and many others. Among other remedial measures, investible funds and designing of integrated financial products with the inclusion of micro insurance are essential, these two vital ones along with including the financial linkages between MFIs and formal banking institutions should be adopted for more enhancement. The study confirms that there are several difficulties and challenges, which hinder the MFIs from progressing and achieving their mission in terms of outreach to the poor people.

MFIs and the microfinance sector should align with state goals of job creation and poverty eradication to rediscover their original mission.

The relationship between governance and the performance of microfinance institutions (MFIs) is discussed in this paper. MFI performance encompasses both financial performance and outreach. Good governance in terms of strengthening stewardship, achievement of MFIs' primary objectives and promoting further development of the industry have been asserted as key elements in the literature pertaining to MFI performance. Similarly, several cases concerning poor governance have been analysed. Good corporate governance has become more important due to the demand for transparency and accountability of funds utilised in microfinance activities. Further, MFIs need to have a solid governance framework to minimise the possibilities of management failures which may jeopardise the efficacious application of received funds from governments and donors. In prior studies, the nature of corporate governance practised by MFIs is less understood and no substantive work using multiple MFI outcomes over a number of years has been undertaken. The concerns raised in reviews of individual MFIs and normative discussions of what should constitute best practice do point to the need for better understanding of the nature of corporate governance practised by the MFIs and also, to understand the nature of the relationship that exists between institutional success and corporate governance especially for developing countries. This study therefore identifies and provides a framework for undertaking corporate governance research relating to MFIs.