Abstract Microfinance funds are pioneers in the impact investing sector and play a key intermediary role in orienting capital flows from investors in developed countries to microfinance institutions in developing countries. They invest with the objective of having an impact that will contribute to enhance sustainable development. Despite their three- decade legacy and experience, microfinance funds are criticized for their lack of rigor and comparability when it comes to impact measurement. This article reflects on how microfinance funds measure their impact and the extent of harmonization in the field. The conclusion highlights the different objectives among microfinance funds and the role that actors play in establishing their measurement practices and the influence this can have on the current harmonization level of impact measurement practices. Los fondos de microfinanciación son pioneros en el sector de la inversión de impacto y desempeñan un papel intermediario clave a la hora de orientar los flujos de capital de los inversores de los países desarrollados hacia las instituciones de microfinanciación de los países en desarrollo. Estos fondos invierten con el objetivo de tener un impacto que contribuya a potenciar el desarrollo sostenible. A pesar de su legado y experiencia de tres décadas, los fondos de microfinanciación son criticados por su falta de rigor y comparabilidad a la hora de medir el impacto. Este artículo reflexiona sobre la forma en que los fondos de microfinanciación miden su impacto y el grado de armonización en este campo. La conclusión destaca los diferentes objetivos entre los fondos de microfinanciación y el papel que desempeñan los actores en el establecimiento de sus prácticas de medición, así como la influencia que esto puede tener en el nivel actual de armonización de las prácticas de medición del impacto. Les Fonds de microfinance sont pionniers dans le secteur de l'investissement d'impact et jouent un rôle d'intermédiaire clé dans l'orientation des flux de capitaux des investisseurs des pays développés vers les institutions de microfinance des pays en développement. Ils investissent avec l'objectif d'avoir un impact qui contribuera à améliorer le développement durable. Malgré leur héritage et leur expérience de trois décennies, les Fonds de microfinance sont critiqués pour leur manque de rigueur et de comparabilité lorsqu'il s'agit de mesurer leur impact. Cet article se penche sur la manière dont les Fonds de microfinance mesurent leur impact et sur le degré d'harmonisation dans ce domaine. La conclusion met en évidence les différents objectifs des Fonds de microfinance et le rôle que jouent les acteurs dans l’établissement de leurs pratiques de mesure et l'influence que cela peut avoir sur le niveau d'harmonisation actuel des pratiques de mesure d'impact.

The study investigates factors affecting the financial performance of Self-Managed Microfinance Funds (SMMFs) in Arusha, Tanzania, with a focus on their role in urban economic empowerment. The study adopted a pragmatic research philosophy suited to the study's focus. Using a descriptive research design, the study sampled 50 employees from SMMFs, employing both quantitative and qualitative data collection through questionnaires, interviews, and financial reports. A multi-sampling technique was employed, involving purposive identification of the population, followed by simple random stratification, and finally, convenient sampling for data collection. Key findings revealed that 70% of the respondents indicated their SMMFs had clear governance structures, with regression analysis showing a positive correlation (r = 0.67) between strong governance and higher profitability. Additionally, 20% of respondents participated in financial literacy training, and 80% of them reported improved loan and savings management. Loan repayment rates were high, with 75% of respondents reporting rates above 80%, and a strong positive correlation (r = 0.72) was observed between financial literacy and repayment success. Challenges included capital shortages, with 40% of respondents reporting inadequate capital, alongside external issues such as poor economic conditions and weak regulatory enforcement. Despite this, 60% of respondents noted sufficient capital availability. The study concluded that governance structures, financial literacy, and capital availability are crucial to SMMFs' financial sustainability. It recommended enhancing governance practices through leader training, expanding financial literacy programs for all members, improving access to capital by partnering with local governments, and developing risk mitigation strategies to address economic challenges. These measures aim to strengthen the financial performance and long-term sustainability of SMMFs.

PurposeThe authors study the effect of an exogenous shock in the form of Coronavirus lockdowns on individual default and on default contagion within the microfinance (MF) sector in India. The authors rely on proprietary data obtained from an MF institution for the period from Nov 2019 to Dec 2020. The authors show that default increased to 95.29% in the month of April 2020, when Covid lockdowns were fully in place. However, borrowers bounced back thereafter, either making full or partial payments, so that defaults had fallen to 5.92% by December 2020. Static features of the group lending model like peer monitoring and joint liability help explain 90% of the monthly deficit during Covid lockdowns among uneducated borrowers. Dynamic features such as contingent renewal help explain why defaults were cured quickly through timely repayments. Finally, there is an absence of default contagion at the district level. Indeed, lagged own default explains 96.6% of variation in individual default, rather than contagion through group, village or district-level defaults. The authors conclude that the MF sector is resilient to exogenous shocks like the pandemic.Design/methodology/approachThe authors use time series panel regressions, as well as cross-sectional regressions.FindingsThe authors find that borrower defaults increased significantly to 95.29% during the month of April 2020, when Covid lockdowns were fully in place. However, borrowers bounced back almost immediately, either making full or partial payments, such that defaults had fallen to 5.92% by December 2020. The group lending model does remarkably well in explaining defaults even during Covid lockdowns. Among the majority (92%) of borrowers who are residents of rural districts, the group lending model appears to blunt the impact of the exogenous shock on rates of default. Indeed, panel regressions demonstrate that the group lending model helps explain 90% of the monthly deficit among uneducated borrowers. Logistic regressions indicate that the group lending model is less persuasive among relatively affluent borrowers residing in semi-urban or urban areas who have some formal schooling. Contingent renewal is shown to be an effective disciplining mechanism when a group does default due to the Covid lockdowns. The authors find that groups who defaulted in April 2020 but repaid the outstanding balance within the next two months were more likely to receive subsequent loans from the lender. On the other hand, groups who defaulted in April 2020 and did not repay the outstanding balance until December 2020 did not receive follow-on financing. Finally, the authors find that lagged individual default is the primary source of individual default, rather than contagion through group, village or district-level defaults.Research limitations/implicationsThe limitation of the study is that it is confined to a single MF institution in India.Social implicationsThe authors conclude that the social capital that is the foundation of the group lending model succeeds in limiting both the risk and contagion of default from an exogenous shock, such as the Covid pandemic.Originality/valueTo the best of the authors’ knowledge, the authors are the first to examine defaults in the Indian MF sector during the Covid lockdowns in April 2020.

Microfinance funding is widely regarded as an effective method for reducing poverty and empowering women. The effects of microfinance from India on the empowerment of women were examined in this study. To limit the potential impact of immaterial factors, a comprehensive array of primary and secondary data, along with propensity score matching, was collected. The research results indicated that microfinance significantly increased monthly household earnings and enhanced asset characteristics. Although female entrepreneurship and revenue production were facilitated by microfinance, no impact was observed on women's family choices or mobility in accordance with the hierarchical structure of family income and spending across various Indian states. The findings from this research have contributed to the body of knowledge in three distinct ways, both technically and experimentally. The present research provides new insights into the theory of empowerment by demonstrating how various aspects of women's economic and social advancement are influenced by the availability of microfinance. Finally, societal and cultural norms were found to have a significant effect on female characteristics and lifestyles, illustrating how community and familial customs impacted the effects of microcredit on women's empowerment and vice versa.

Farmers in upland areas struggle with the accessibility of financial institutions. Due to their remote location and the absence of finance branch offices; therefore, The Ministry of Agriculture and the Islamic Development Bank (IsDB) are working together to resolve finance access difficulties by developing Agribusiness Microfinance Institutions (MFI) in upland communities. The study aimed to assess the agricultural sector’s potential and funding restrictions and examine the growth of microfinance in the Upland area. The study was conducted in Garut, Tasikmalaya, Lebak, and Subang districts in October and November 2022. Both primary and secondary data were included in the data set. The data were then descriptively and qualitatively analyzed. The findings indicate that the research area has the potential to expand microfinance based on the existing financial institutions established by the government in various programs. The fundamental issue with MFI is a need for more liquidity, the fulfilment of legality requirements, the role of local governments to arrange, microfinance financial management system plan, implementation of banks as microfinance fund distributors, and loan interest rates paid to farmers. Efforts are needed to speed up the microfinance development process in partnership with formal financing institutions dedicated to assisting farmers and business operators in providing capital.

The purpose of this study was to determine the role of microfinance institutions in empowering the small and medium-sized communities. SMEs really need the role of microfinance institutions, especially in terms of funds to expand markets and develop their businesses, so as to make a large contribution to the national economy. The role of MFIs has been tested, survived the economic crisis and even strengthened. MSMEs are business units where the Indonesian economy has so far relied heavily on MFIs. It is not surprising that many parties have turned their attention to MFIs, but the attention given has not fully touched the face of MFIs with fundamental questions. microfinance institutions so that they can actually strengthen and develop as micro, small and medium enterprises, especially financial institutions in small communities. This microfinance institution was established because it was driven by the community's need for funds to develop their business. the question about the need for funds faced by the majority of the community has been responded positively by several people who are willing to lend some of their funds for MSME capital. Funds lent to customers come from the MFI's own funds or from depositing funds into the microfinance fund of the client's institution. Judging from the potential and funding sources that have been implemented, the MFI actually serves customers and manages them based on. If financial institutions can coordinate fund management with each other, then this can be a huge advantage

Community microfinance is valuable at all levels of societal development - politically, economically, and socially. It binds all developmental initiatives in society. It is an indicator of human development that provides people with varied chances of choices for the betterment of their living standards. Therefore, the study examined the effects of community microfinance on human development in Vihiga County of Kenya. It adopted a descriptive survey design and stratified sampling technique to select a sample size of 384 women respondents from a target of 12,000 members of microfinance institutions in Vihiga County. Multivariate regression model was used to analyze study findings and was anchored in the capability approach. The results indicate that majority of the respondents (66.9 %) had secured accounts with microfinance institutions whil 70.3% had secured loans from the institutions to improve their lives. Further, the study established that loans advanced were mostly used in educating the household members as evidenced by the 38.8% of respondents. This has positively influenced the literacy levels in Vihiga County, and since education is one of the measures of human development, an improvement in literacy level therefore, results in human development. The study also indicated the following: a mean of 1.67 and standard deviation of 0.471 for members with accounts, a mean of 1.70 and standard deviation of 0.457 for those that received loans from the microfinance, while the respondents who had no problems in repaying the loans had a mean of 2.30 and standard deviation of 1.015, while the calculated t-value was less than the critical value at 5% level of significance. The study concluded that indeed microfinance empowerment funds affect human development in Vihiga County since there was a real difference among the surveyed group members who were able to access the micro finance services. This study further recommends that funds should be made available at affordable interest rates so that communities can invest in projects that improve human well-being. Learning institutions including technical and vocational training institutions promote human development and should be considered priority projects. This should also be adopted in other counties in Kenya to achieve holistic development in the country.

Отражена сущность финансовых проблем, препятствующих развитию малого и среднего бизнеса. С целью их решения обоснована целесообразность развития микрофинансирования. Проведен обзор микрозаймов, предоставляемых Фондом микрофинансирования субъектов малого и среднего предпринимательства Краснодарского края. Особое внимание уделено характеристике специальных антикризисных займов, предоставляемых с 2020 года для субъектов бизнеса, пострадавших от ограничительных мер, введенных из-за распространения новой коронавирусной инфекции. Проведен расчет сравнительной эффективности микрозайма и кредита на инвестирование в основной капитал субъектами малого и среднего бизнеса. The essence of financial problems hindering the development of small and medium-sized businesses is reflected. In order to solve them, the expediency of the development of microfinance is justified. The review of microloans provided by the Microfinance Fund for Small and Medium-sized businesses of the Krasnodar Territory is carried out. Special attention is paid to the characteristics of special anti-crisis loans provided since 2020 for business entities affected by restrictive measures introduced due to the spread of a new coronavirus infection. The calculation of the comparative effectiveness of a microloan and a loan for investing in fixed assets by small and medium-sized businesses is carried out.

The role of emotion in P2P microfinance funding: A sentiment analysis approach

One of the advantages of using Islamic social funds is the increased ability of microfinance institutions to provide financial services to the poor. This study aims to (1) investigates the characteristics of the clients of the Islamic Charity Based Microfinance (ICBM) program; (2) test whether the clients ICBM program are more vulnerable than the non clients group (3) discuss the rationale of why poor excluded from the zakat based microfinance program. The study was conducted in the microfinance program at zakat institutions namely Baitul Maal Muamalat (BMMI), BAZNAS, and Baitul Maal Beringharjo (BMB). A total of 236 respondents including clients and non-clients of three case study institutions were participated in this study. The data is analyzed using binomial logit model to evaluate factors affecting clients participation in ICBM programs in Indonesia. The findings show that clients and non-clients of ICBM have a similar demographic profile and the majority ICBM clients live above the national poverty line, yet they live perilously close to the edge of the poverty line. Using logistic regression, this study found that the higher the client’s income level, the higher the probability of their being selected in the program. This findings contradict with the existing Islamic microfinance literature that claim ICBM institutions in general could demonstrate a capacity to extend their services more widely to the poorest if Islamic charity is the main source of microfinance funding. This study suggests some possible barriers to include the poor in the microfinance including institutional selection policy and self exclusion factors.

This research an investigation into the extent to which Microfinance institutions are contributing to the Financial Inclusion Strategy in Zimbabwe was undertaken because microfinance institutions in Zimbabwe have been failing to play their role in order to achieve financial inclusion. This research study was guided by research objectives namely 1) to investigate the feasibility of integrating microfinance and mobile banking to accelerate financial inclusion, 2) to determine the extent of financial inclusion in geographically remote areas and 3) to establish necessary measures that will shift usage of microfinance funding from consumption to productive purpose. The target population for this study was comprised of 5 microfinance organizations namely Coverlink microfinance, Getbucks microfinance, CBZ microfinance, Solid microfinance and Steward microfinance which had a total of 320 employees taken from their human resources offices in their headoffices in Harare, Zimbabwe. The researcher adopted a sample of 120 employees which were attained through the use of Raosoft online sample size calculator. A stratified sampling was adopted to choose the sample from microfinance institutions in Zimbabwe. This research study revealed that there tend to be lacking feasibility of integrating microfinance and mobile banking to accelerate financial inclusion in Zimbabwe, financial inclusion has been adopted in geographically remote areas through mobile phones and financial deepening, measured by bank credit to the private sector, reduced corruption thereby acted as a measure that shifted usage of microfinance funding from consumption to productive purpose. It is recommended that Microfinance institutions should contribute to the Financial Inclusion Strategy in Zimbabwe.

Numerous microfinance initiatives around the world aim to alleviate poverty in developing countries. However, debate persists about their effectiveness and sustainability – a concern for transnational corporations and the international business community, which contribute about $9.4 billion to microfinance funding. In this policy-oriented article we aggregate findings from two studies in Indonesia that help explain why moneylending can still thrive when low-interest microfinance is widely available and why the poorest borrowers benefit less than the less-poor. To avoid methodological debates about validity, we interview market participants and triangulate the perspectives of borrowers with those of formal and informal lenders. Importantly, our research includes current and past borrowing from formal and informal sources, prompting participants to draw comparisons. We find that the importance to borrowers of key characteristics of informal lending is insufficiently recognized and that inappropriate human resource management and informal intermediation are significant problems. The latter can be an unintended consequence of formal microfinance: The availability of formal low-interest microfinance creates informal intermediation opportunities for entrepreneurs, often developing from casual intermediation into systematic deception. We discuss implications for microfinance policy with reference to the United Nations Sustainable Development Goals and offer suggestions for further research.

Purpose This paper aims to propose cash waqf (endowment) to develop a conceptual model that can be utilised to extend microfinance for refugees. Design/methodology/approach Qualitative method is used in this research. An extensive review of the literature has been conducted. Latest literature on refugees, microfinance has been critically examined beside the current cash waqf models. Findings Empirical studies have shown that many refugees are equipped with marketable skills and talents that can be utilised to improve their socio-economic situations. The proposed model – cash waqf refugee microfinance fund (CWRMF) – is structured to extend microfinance to potential refugee micro entrepreneurs. To address the lack of collateral, which is a requirement to gain any microfinance, CWRMF has been incorporated with a takaful unit (cooperation) by which refugees may guarantee each other. Additionally, the model has also been structured to address the challenge of sustainability of the institution that would provide microfinance. Hence, a reserve fund has also been integrated into the model. Practical implications CWRMF represents a potential model to be implemented by humanitarian non-governmental organisations (NGOs) and aid agencies to support livelihood of refugees in particular for Muslim refugees. Positive outcome is expected from the implementation of this model. This is because of the various advantages of microfinance programs not only on refugees but also on concerned NGOs, host populations and donor parties. Additionally, this paper is a set of primarily thoughts aims to open the door wider for more researchers to explore the potential of cash waqf as one of the instruments to finance refugee microenterprises and business activities. Originality/value Recently cash waqf has been into several models for socio-economic development and poverty alleviation. This paper is proposing cash waqf as a source for a microfinance fund that can contribute in the improvement of socio-economic situations of millions of refugees around the world.

ABSTRACTThe Internet has created new opportunities for peer-to-peer (P2P) social lending platforms, which have the potential to transform the way microfinance institutions raise and allocate funds used for poverty reduction. Depending upon where decision-making rights are allocated, there is the potential for identification bias whereby lenders may be motivated to give to specific projects with which they have an affinity without regard to whether it represents a sound financial investment. Using data collected from Kiva, we present empirical evidence that distant upstream lenders do not have adequate information about local business and loan conditions to make sound microfinance funding decisions, but instead make decisions based on identification biases. Furthermore, more information provided on the P2P lending site about the prospective loan does not improve the lender’s information about the loan conditions, but rather exacerbates the identification bias effect.

Abstract The stage of the formation and establishment of a market economy in Georgia raises the necessity for economic science to solve fundamentally different problems concerning the improvement of the investment environment and investment climate in national economy. After the collapse of the former Soviet Union, the replacement with new relationships has been quite difficult and painful in which foreign investments should play a crucial role. Issues to be discussed include the questions that explore some of the categories and the constraints of the investment climate (potential). All this leads to the relevance of the article and, therefore, determines the purpose of the article. The research process uses general dialectical methods of socio-economic research (description, analysis, systematization, abstraction, synthesis) as well as modern methods of research of economic theory (systemic, institutional, evolutionary). The scientific aim of the research is to highlight the current issues of the investment environment and investment climate in economy, to study the transformation processes taking place in Georgia during the last two decades, to conduct analysis using proper methods, to show the current social and political as well as other important processes, to generalize them and to form proper opinions. Findings based on research suggest that it is possible to speed up the process of economic development of Georgia. However, the situation will remain difficult in the region and the factors causing the recession _ instability in oil prices and the weakening of the national currency against the US dollar will still be present. In conclusion, the opinion can be formed that a stable and predictable legislative process is important for the investment environment. Therefore, all the parties that may undergo the changes should be informed and involved in every project planned by the government; At present, it becomes necessary to further extend the deregulation policy, which should include the development of financial and investment sectors and support of the establishment of appropriate infrastructure, promotion of the further development of microfinance institutions, investment companies and funds, designing the system of investment insurance and stimulation, elimination of unnecessary bureaucracy and artificial barriers, etc.

Microcredit and adjustment to environmental shock: Evidence from the Great Famine in Ireland

Like other developing countries, microcredit in Vietnam has been recognized as an important credit source of the poor, who need capital but are normally by-passed by commercial banks. However, the provision of credit to the poor is challenged by the existing tradeoff between depth of outreach and financial sustainability. In this study, Principal Component Analysis and Propensity Score Matching were used to assess whether microcredit reaches the poor and its role in poverty reduction. The Microfinance Fund and Community Development (MFCD), a microfinance institution in Northern Vietnam was selected as a case study. The research has shown that microcredit successfully reaches the poor households as 67% of credit recipients belong to the last three bottom groups. The observed poverty targeting is consistent with the mission of the microfinance institution. In addition, the provision of microcredit has positive but statistically insignificant impact on household income and expenditure. This study suggests that unless access to additional resources should be made available to the poor, a small amount of credit alone could be insufficient to reduce poverty.

This article is concerned with contribution of microfinance investment funds to a sustainable financial portfolio. With regard to the dependence of microfinance funds’ returns on the performance of stock and fixed income markets in developed and emerging economies we find slightly negative correlation when measured by the portfolio beta measure. Our regression analysis confirms that returns on investment in microfinance investment funds exceed the returns on the market portfolio. This result together with reported near-to-zero beta estimates as a proxy for the systematic risk may be taken to be a clear financial advantage of an inclusion of microfinance assets in a portfolio compared to pure stock or bond portfolios. The results based on CAPM beta and Jensen's alpha are confirmed by mean-variance spanning test. We show that the socially responsible investors may invest into microfinance without sacrifice with respect to pure financial indicators.

This article examines how the gendering of high-risk financial strategies as masculine relies on and erases feminized reproductive work in the global South. I argue that the daily fallout of risky strategies—what I call peril—is the supplement to risk and that coping with peril constitutes the primary form of reproductive work of the current era. The global success of microfinance, currently cited as the best and most effective path to poverty alleviation, can be seen through this lens as a result of its ability to translate (masculine) risk into (feminine) peril; it is precisely because microfinance funds the work of getting by in the domestic sphere (and not the entrepreneurialism of the poor) that it is embraced by global business and development planners alike. I then show how the most recent trend in microfinance lending—peer-to-peer network lending, as exemplified by the wildly popular San Francisco Bay Area–based website Kiva.org—participates in the translation of risk into peril through visual and narrative techniques that give the transaction an aura of connection and mutuality. Much as the family has been described in classical Marxist-feminist analyses of industrial capitalism, peer-to-peer lending depends on decontextualized, feelingful ties to obfuscate an ongoing and highly unequal economic relationship. Risk, in this scenario, is considered only for lenders, and the real uses and dangers of microfinance borrowing must be ignored.

The Great Famine of Ireland from 1845-51 ranks as one of the most lethal of all time, claiming approximately one eighth of the country’s population. Utilizing Famine Relief Commission reports to develop a micro-level dataset of blight severity, I find that in the short run, districts more severely infected by blight experienced larger population declines and accumulations of buffer livestock. In the medium and long runs, however, worse affected districts experienced greater substitutions toward other tillage crops and grazing livestock. Using annual reports of the Irish Loan Funds, I further find that access to microfinance credit was an important factor in short- and long-run adjustment to blight. Districts with at least one microfinance fund during the Famine experienced substantially smaller population declines and larger increases in buffer livestock during and immediately after the Famine, and greater medium- and long-run substitutions toward other crops and grazing livestock, than districts without a fund.