This paper is the first to analyze the credit risk of a microfinance institution based on the loan portfolio of a leading Maghrebian microfinance institution, both in terms of number of clients served and of portfolio size. This allows us to work with a proprietary data set of 1,144,770...

This paper compares the loans granted to male and female entrepreneurs by a French microfinance institution (MFI). The sample period is split in two: before and after the MFI implemented France's regulatory EUR 10,000 loan ceiling. In the first period, the MFI does not co-finance projects with...

In this paper we compare the main regulatory frameworks: American (US RBC, Risk-Based-Capital), Swiss (SST, Swiss Solvency Test) and European (Solvency II). We improve on the existing literature by focusing on technical aspects of regulation schemes, particularly the capital requirements’...

This paper shines light on subsidy-dependent microfinance institutions (MFIs). Firstly, our model shows that subsidy uncertainty can have pervasive effects on MFIs’ poverty-reduction mission. In particular, we argue that supply-driven uncertainty can lead to mission drift. MFIs maximize...

This paper starts from the observation that 23% of the world’s microfinance institutions (MFIs) manage without subsidies. We examine how unsubsidized institutions cope with their social mission. Overall, the lack of subsidies worsens social performances. However, our results show that...

Banks cut dividends with great reluctance, as if addicted to them. Their apparent addiction is a major cause of concern for regulators because it could endanger the whole banking system. However, banks may be rational in maintaining elevated dividends if agency costs are high and dividends...

The social nature of Microfinance Institutions (MFIs) is mainly financed by subsidies received from the donors. This paper investigates the relationship between the sustainability and the efficiency of microfinance. Using Yaron’s Subsidy Dependence Index (SDI) as a measure of sustainability, a...

Poverty is multidimensional. In its starkest form, the United Nations Development Annual Reports proxy poverty as combined low levels of income, health, and education. Microfinance, on the other hand, addresses directly the income dimension of poverty, and indirectly health and education....