Do microfinance institutions benefit from integrating financial and nonfinancial services?

The impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of MFIs

From:: Department for International Development
Published: 1 November 2017

Document Type:: Journal Article
Theme:: Economic Growth
Authors:: Lensink, R, Mersland, R, Thi Hong Vu, Nhung, Zamore, S

Abstract

This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and efficiency. The results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach.

This is an output from the ‘Delivering Inclusive Financial Development and Growth’ project

Citation

Robert Lensink, Roy Mersland, Nhung Thi Hong Vu & Stephen Zamore (2017) Do microfinance institutions benefit from integrating financial and nonfinancial services?, Applied Economics, 50:21, 2386-2401