Modeling the factors of portfolio at risk for microfinance institutions in Palestine
AbstractThe main objective of this paper is to examine the determinants of portfolio at risk in Palestine by analyzing the impact of macroeconomic and micro-level factors on credit risk for microfinance institutions during the period of 2010–2020. This study includes five regulated MFIs using genera...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-12-01
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| Series: | Cogent Economics & Finance |
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| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2023.2186042 |
| _version_ | 1797658355153502208 |
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| author | Mohammed T. Abusharbeh |
| author_facet | Mohammed T. Abusharbeh |
| author_sort | Mohammed T. Abusharbeh |
| collection | DOAJ |
| description | AbstractThe main objective of this paper is to examine the determinants of portfolio at risk in Palestine by analyzing the impact of macroeconomic and micro-level factors on credit risk for microfinance institutions during the period of 2010–2020. This study includes five regulated MFIs using generalized method of moment estimator. The findings indicate that portfolio at risk is more sensitive to the institutional factors and economic cycle. The operating efficiency and number of loan officers have positive and significant effect on credit risk. However, growth in GDP and number of active borrowers have negative and significant effect on credit risk. But, no evidence supports the impact of inflation and interest rate on vulnerability of credit risk. The conclusion presented may be useful for MFI directors and regulators in timely repayments and credit risk control. Overall, our ample evidence suggests that MFIs directors should consider the influence of institutional factors on their investment and credits decisions. |
| first_indexed | 2024-03-11T17:57:52Z |
| format | Article |
| id | doaj.art-489448f860674dc8b5f50b7cc3b791e5 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-11T17:57:52Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-489448f860674dc8b5f50b7cc3b791e52023-10-17T10:51:06ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-12-0111110.1080/23322039.2023.2186042Modeling the factors of portfolio at risk for microfinance institutions in PalestineMohammed T. Abusharbeh0Department of Finance, Arab American University, Jenin, PalestineAbstractThe main objective of this paper is to examine the determinants of portfolio at risk in Palestine by analyzing the impact of macroeconomic and micro-level factors on credit risk for microfinance institutions during the period of 2010–2020. This study includes five regulated MFIs using generalized method of moment estimator. The findings indicate that portfolio at risk is more sensitive to the institutional factors and economic cycle. The operating efficiency and number of loan officers have positive and significant effect on credit risk. However, growth in GDP and number of active borrowers have negative and significant effect on credit risk. But, no evidence supports the impact of inflation and interest rate on vulnerability of credit risk. The conclusion presented may be useful for MFI directors and regulators in timely repayments and credit risk control. Overall, our ample evidence suggests that MFIs directors should consider the influence of institutional factors on their investment and credits decisions.https://www.tandfonline.com/doi/10.1080/23322039.2023.2186042Portfolio at riskactive borrowersoperational efficiencypersonnelinflationE5 |
| spellingShingle | Mohammed T. Abusharbeh Modeling the factors of portfolio at risk for microfinance institutions in Palestine Cogent Economics & Finance Portfolio at risk active borrowers operational efficiency personnel inflation E5 |
| title | Modeling the factors of portfolio at risk for microfinance institutions in Palestine |
| title_full | Modeling the factors of portfolio at risk for microfinance institutions in Palestine |
| title_fullStr | Modeling the factors of portfolio at risk for microfinance institutions in Palestine |
| title_full_unstemmed | Modeling the factors of portfolio at risk for microfinance institutions in Palestine |
| title_short | Modeling the factors of portfolio at risk for microfinance institutions in Palestine |
| title_sort | modeling the factors of portfolio at risk for microfinance institutions in palestine |
| topic | Portfolio at risk active borrowers operational efficiency personnel inflation E5 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2023.2186042 |
| work_keys_str_mv | AT mohammedtabusharbeh modelingthefactorsofportfolioatriskformicrofinanceinstitutionsinpalestine |