Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies
Maintaining an optimal level of liquidity remains a crucial agenda for firms to minimise liquidity risks. Therefore, the study aims to identify the drivers of liquidity by utilizing firm-level data of 1,544 microfinance institutions (MFIs), covering a total of 112 developing countries and a period o...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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World Scientific Publishing Co. Pte Ltd.
2024-03-01
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| Series: | International Journal of Empirical Economics |
| Subjects: | |
| Online Access: | https://www.worldscientific.com/doi/10.1142/S281094302450001X |
| _version_ | 1797232501367767040 |
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| author | Adamu Jibir Michael Omeke Md Aslam Mia Sunil Sangwan |
| author_facet | Adamu Jibir Michael Omeke Md Aslam Mia Sunil Sangwan |
| author_sort | Adamu Jibir |
| collection | DOAJ |
| description | Maintaining an optimal level of liquidity remains a crucial agenda for firms to minimise liquidity risks. Therefore, the study aims to identify the drivers of liquidity by utilizing firm-level data of 1,544 microfinance institutions (MFIs), covering a total of 112 developing countries and a period of 2010–2018. The data were then analysed using conventional econometric tools and techniques. Among others, the study found that board size, portfolio quality, donations and size of MFIs have a positive effect on the liquidity of MFIs, while gender diversity at the board level, operational self-sustainability, staff productivity, legal status and gross domestic product (GDP) growth revealed a negative effect. After conducting several robustness checks, including alternative proxies, sub-samples and endogeneity-corrected techniques, our findings remain mostly consistent. Policy implications are further discussed. |
| first_indexed | 2024-04-24T16:01:17Z |
| format | Article |
| id | doaj.art-1a96a26b973a4fbaa82404d502576c50 |
| institution | Directory Open Access Journal |
| issn | 2810-9430 2810-9449 |
| language | English |
| last_indexed | 2024-04-24T16:01:17Z |
| publishDate | 2024-03-01 |
| publisher | World Scientific Publishing Co. Pte Ltd. |
| record_format | Article |
| series | International Journal of Empirical Economics |
| spelling | doaj.art-1a96a26b973a4fbaa82404d502576c502024-04-01T07:12:51ZengWorld Scientific Publishing Co. Pte Ltd.International Journal of Empirical Economics2810-94302810-94492024-03-01030110.1142/S281094302450001XDeterminants of Liquidity in Microfinance Institutions: Evidence from Developing EconomiesAdamu Jibir0Michael Omeke1Md Aslam Mia2Sunil Sangwan3Department of Economics, Gombe State University, Gombe 760253, NigeriaDepartment of Finance, Accounting and Microfinance, School of Management and Entrepreneurship, Kyambogo University, Kampala, UgandaSchool of Management, Universiti Sains Malaysia, Penang 11800, MalaysiaInstitute of Rural Management Anand, Anand, Gujarat 388001, IndiaMaintaining an optimal level of liquidity remains a crucial agenda for firms to minimise liquidity risks. Therefore, the study aims to identify the drivers of liquidity by utilizing firm-level data of 1,544 microfinance institutions (MFIs), covering a total of 112 developing countries and a period of 2010–2018. The data were then analysed using conventional econometric tools and techniques. Among others, the study found that board size, portfolio quality, donations and size of MFIs have a positive effect on the liquidity of MFIs, while gender diversity at the board level, operational self-sustainability, staff productivity, legal status and gross domestic product (GDP) growth revealed a negative effect. After conducting several robustness checks, including alternative proxies, sub-samples and endogeneity-corrected techniques, our findings remain mostly consistent. Policy implications are further discussed.https://www.worldscientific.com/doi/10.1142/S281094302450001XLiquidityliquidity risksgender diversityboard sizemicrofinance institutionscash holdings |
| spellingShingle | Adamu Jibir Michael Omeke Md Aslam Mia Sunil Sangwan Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies International Journal of Empirical Economics Liquidity liquidity risks gender diversity board size microfinance institutions cash holdings |
| title | Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies |
| title_full | Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies |
| title_fullStr | Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies |
| title_full_unstemmed | Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies |
| title_short | Determinants of Liquidity in Microfinance Institutions: Evidence from Developing Economies |
| title_sort | determinants of liquidity in microfinance institutions evidence from developing economies |
| topic | Liquidity liquidity risks gender diversity board size microfinance institutions cash holdings |
| url | https://www.worldscientific.com/doi/10.1142/S281094302450001X |
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