Are Regulatory Micro Finance Institutions Better Off Than Non-Regulatory Ones? A Comparison of Performance and Sustainability.

Paradigm, 19(1), 21-36, 2015

Posted: 3 Jan 2016

See all articles by A. P. Pati

A. P. Pati

North Eastern Hill University

Date Written: April 30, 2015

Abstract

In this paper an empirical study has been made to compare the social (outreach related) and financial (cost, profit and sustainability related) performances of regulated microfinance institutions (MFIs) with non-regulated MFIs and to identify the causal variables of such performances. With the help of a panel data set of last five years i.e. from 2008-09 to 2012-13 it is found that the preference of Indian MFIs for regulatory structure has not been culminated with better performance. Through the causal study, which is performed through fixed effect regression model no impact of regulation is visible. Among the important explaining variables capital structure, size of operating expenditure and quality of assets are found to be prominently responsible for outreach and sustainability of Indian MFIs.

Keywords: Micro finance institutions, Regulation, Performance, Sustainability

JEL Classification: G23

Suggested Citation

Pati, Ambika Prasad, Are Regulatory Micro Finance Institutions Better Off Than Non-Regulatory Ones? A Comparison of Performance and Sustainability. (April 30, 2015). Paradigm, 19(1), 21-36, 2015, Available at SSRN: https://ssrn.com/abstract=2710074

Ambika Prasad Pati (Contact Author)

North Eastern Hill University ( email )

Umshing-Mawkynroh
Shillong
Meghalaya, 793022
India

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