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Comparative Study of Microfinance Sustainability: Credit Risk-Taking and Capital Structure

Marwa Fersi & Mouna Boujelbène

International Journal of Management, Economics and Social Sciences2023https://doi.org/10.32327/ijmess/12.3.2023.8article
AJG 1
Weight
0.42

What the paper says

The purpose of this paper was to investigate the determinants of risk-taking in the context of Islamic and conventional microfinance institutions (MFIs) while considering the capital structure's role in moderating the risk-taking decisions' effect on financial performance.Fixed and Random effects GLS with a first-order autoregressive disturbance was used to empirically analyze the impact of risk-taking on performance as well as the role of capital structure in moderating the effects on the relationship between non-performing loans and performance.The dataset covers 179 Conventional MFIs and 57 Islamic MFIs in four different regions over the 2005-2015 period.Risk-taking determinants exposed by high loan growth, low-interest margin, and low loan loss provisions were revealed to have negative consequences on risk exposures for both MFIs on average.These indicators are significantly and positively related to a lower loan portfolio quality.Therefore, this risk-taking behavior harms these MFIs' performance.The moderating effect of capital structure within leverage funding on the relationship between nonperforming loan indicators and financial performance was confirmed in Conventional microfinance institutions.This paper can be considered a pioneer attempt to evaluate the determinants of risktaking decisions and their implications on the financial performance and sustainability of microfinance institutions.

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https://doi.org/https://doi.org/10.32327/ijmess/12.3.2023.8

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@article{marwa2023,
  title        = {{Comparative Study of Microfinance Sustainability: Credit Risk-Taking and Capital Structure}},
  author       = {Marwa Fersi & Mouna Boujelbène},
  journal      = {International Journal of Management, Economics and Social Sciences},
  year         = {2023},
  doi          = {https://doi.org/https://doi.org/10.32327/ijmess/12.3.2023.8},
}

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Comparative Study of Microfinance Sustainability: Credit Risk-Taking and Capital Structure

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Evidence weight

0.42

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.19 × 0.4 = 0.08
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.