II.4.2- Studies on the social performance of
microfinance institutions
In 2006, Zeller & Johannsen examined the breadth and depth
of outreach of microfinance in Bangladesh and Peru. The authors (2006, p. 29)
find «that member based organizations, namely cooperatives in Peru and
NGO-MFIs based on solidarity group lending in Bangladesh, perform best with
respect to depth of poverty outreach». The authors find that a long-term
relationship between the financial service provider and the client enhances the
institutions financial sustainability and the programs social impact. Also,
poorer populations seem to demand microcredit services rather than saving
services. The authors (2006, p. 31) concluded that «MFIs that expand in
rural areas, that actively target women, and that use poverty targeting
indicators to screen out wealthier applicants are likely to have a higher
poverty outreach». In 2007, Mersland & Strom (2007) found that the
type of ownership of MFIs does not significantly influence their social
performance. The authors (2008, p. 4) use Schreiner?s (2002) framework, but
reject the hypothesis that greater depth in NGOs is a trade-off against lower
breadth, length and scope of their activities. «NGOs are not more socially
orientated that SHFs [shareholder-owned MFIs], nor are SHFs more profit
orientated than NGOs», according to Mersland & Strøm (2007, p.
5). On the contrary, Gutiérrez-Nieto, Serrano-Cinca & Mar Molinero
(2009) found that NGOs show the highest level of social efficiency, with the
number of active women borrowers reached as their output. More recently,
Lensink & Mersland (2009) explored the concept of microfinance plus?. The
authors distinguish between MFIs that specialize in their financial service
activities, and MFIs that provide additional non-financial
service6.
The authors find that microfinance plus providers are: (1)
NGOs, (2) unregulated by banking authorities, and (3) mainly providing
microfinance services through village banking methodologies. Being part of an
international microfinance network does not seem to influence whether a MFI
provides plus services. Also, the authors find that microfinance plus providers
reach out to poorer microfinance clients and reach out to a higher percentage
of women borrowers.
The number of clients reached by the MFIs grew significantly
over the period 2005-2007. The median number of active borrowers is highest in
Asia. Outreach to microfinance clients grew in 2007, but at a slower pace than
in previous years. Microfinance banks perform exceptionally well in terms of
number of active borrowers reached. Second, MFIs in Asia seem to concentrate on
solely serving women microfinance clients. MFIs in the African, Latin
6 For example, MFIs may provide
literacy training, health services, or business training to their microfinance
clients.
20
Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
American and the Caribbean, and the Middle Eastern and North
African region predominantly serve women borrowers. Less than 50 percent of the
microfinance clients in the Eastern European and Asian region are women.
Alternatively, NGOs and rural banks perform best in reaching out to women
micro-entrepreneurs. Third, the cost per borrower ratios is calculated by
dividing the operating expense by the average number of microfinance clients
over a period of a MFI. The expenses per client are lowest for NGOs and rural
banks, while microfinance banks face significantly higher operating expenses.
Despite their aver-age number of borrowers reached, microfinance banks do not
seem to benefit from economies of scale. Alternatively, the costs per borrower
ratios are highest in the Eastern European and Central Asian region, and lowest
in the Asian region. Fourth, the average loans balance per borrower /the GNI
per capita is highest in Eastern Europe and Central Asia. Unexpectedly, the
correction for GNI per capita allows for a relatively high average loan size in
Africa. The average loan balance per borrower / GNI per capita is unambiguously
lowest for NGOs. Banks report average loan sizes over five times as high as the
average loan sizes reported by NGOs. Credit unions and NBFIs report average
loan sizes in-between those reported by NGOs and microfinance banks. (MIX,
2008, 2009d)
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