Do Microfinance Institutions Benefit from Integrating Financial and Nonfinancial Services?

36 Pages Posted: 2 Mar 2018

See all articles by Robert Lensink

Robert Lensink

University of Groningen - Department of Economics, Econometrics and Finance; Wageningen UR - Development Economics Group

Roy Mersland

University of Agder

Vu Thi Hong Nhung

Can Tho University - School of Economics and Business Administration

Stephen Zamore

University of Agder, School of Busines and Law, Students

Date Written: November 10, 2017

Abstract

This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and efficiency. The results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach.

Keywords: Microfinance ‘plus’, business development services, outreach, financial sustainability

JEL Classification: G21, O16, C23

Suggested Citation

Lensink, Robert and Mersland, Roy and Nhung, Vu Thi Hong and Zamore, Stephen, Do Microfinance Institutions Benefit from Integrating Financial and Nonfinancial Services? (November 10, 2017). Applied Economics, Vol. 50, No. 21, 2018. Doi: abs/10.1080/00036846.2017.1397852, Available at SSRN: https://ssrn.com/abstract=3126351

Robert Lensink

University of Groningen - Department of Economics, Econometrics and Finance ( email )

P.O. Box 800
9700 AH Groningen
Netherlands

Wageningen UR - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands

Roy Mersland

University of Agder ( email )

Serviceboks 422
N-4604 Kristiansand, VEST AGDER 4604
Norway

HOME PAGE: http://www.uia.no/microfinance

Vu Thi Hong Nhung

Can Tho University - School of Economics and Business Administration ( email )

School of Economics and Business Administration
Can Tho City
Vietnam

Stephen Zamore (Contact Author)

University of Agder, School of Busines and Law, Students ( email )

Serviceboks 422
Kristiansand, N-4604
Norway

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