Microfinance institutions' mission drift in macroeconomic context

Shufang Xu, James Copestake, Xinman Peng

Research output: Contribution to journalArticle

11 Citations (Scopus)
200 Downloads (Pure)

Abstract

We theoretically discuss the potential macroeconomic influences on MFIs’ depth of outreach and provide empirical evidence, using panel analysis, to investigate determinants of average loan balance per borrower as a percentage of national GNI per capita (ALB), 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 (FDI) and domestic credit to the private sector (DCPS). This suggests mission drift is associated not only with MFI-specific factors, but also influence by macroeconomic context.
Original languageEnglish
Pages (from-to)1123-1137
Number of pages16
JournalJournal of International Development
Volume28
Issue number7
Early online date1 Apr 2015
DOIs
Publication statusPublished - Oct 2016

Keywords

  • microfinance; mission drift; depth of outreach; financial performance; social performance; macroeconomic influences

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