Abstract
The performance of microfinance institutions is debatable. Evidence shows that some microfinance institutions successfully achieve dual objectives, social and financial, while some fail to achieve them. Islamic microfinance institutions (IMFIs) are widely accepted in OIC countries as its products are based on Islamic principles, however its share is very small in the world. Therefore, this study aims to investigate the impact of macroeconomic, macro institutional factors and digitalization on the financial and social performance of Islamic microfinance institutions in OIC countries. Using panel data of 35 Islamic microfinance institutions from 2008 to 2019. The results found that macroeconomics and country-level institutional variables have mixed impact on the performance of Islamic microfinance institutions. In addition, digitization enhances the performance of (IMFIs). The study presents several policy recommendations for improvement in performance.
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