Factors Influencing Portfolio Yield of Microfinance Institutions in Central Asia

We analyze the determinants of portfolio yield of microfinance institutions in Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Azerbaijan, Mongolia, Afghanistan, and China over the period 1998-2011. We confirm that targeting women borrowers improves the financial results of microfinance institutions whereas the effectiveness of group lending or advantages of rural lending, in contrast to the initial expectations, were not confirmed. We also consider the contributions of different governance forms of microfinance institutions and the macroeconomic factors potentially influencing the financial performance of microfinance institutions. As a part of this paper we also provide a self contained introduction to microfinance theory for a reader not familiar with microfinance