Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries
In order for microfinance institutions (MFIs) to significantly impact the society, they must achieve both financial sustainability and outreach goals simultaneously. However, when MFIs prioritize financial sustainability at the expense of their outreach goals, it is regarded as mission drift. This s...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2023-07-01
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| Series: | Asia and the Global Economy |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2667111523000099 |
| _version_ | 1827583628579700736 |
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| author | Md Aslam Mia Adamu Jibir Arpita Sharma Musa Abdu |
| author_facet | Md Aslam Mia Adamu Jibir Arpita Sharma Musa Abdu |
| author_sort | Md Aslam Mia |
| collection | DOAJ |
| description | In order for microfinance institutions (MFIs) to significantly impact the society, they must achieve both financial sustainability and outreach goals simultaneously. However, when MFIs prioritize financial sustainability at the expense of their outreach goals, it is regarded as mission drift. This study introduces the concept of the Kuznets curve hypothesis to explain the occurrence of mission drift in MFIs. By analysing data from 1,323 unique MFIs across 105 emerging countries, between 2010 and 2018, our findings corroborate the existence of the Kuznets curve for outreach and financial goals. The findings demonstrate that MFIs initially prioritize their outreach goal of serving more female clients but gradually shift focus towards financial performance as they expand and accumulate fixed assets. Moreover, we also empirically quantified the critical asset size of MFIs beyond which they are less likely to achieve their outreach and financial sustainability goals. The implications of these findings for policy are also discussed. |
| first_indexed | 2024-03-08T23:09:29Z |
| format | Article |
| id | doaj.art-727a366efb73455f97f77115d26129d3 |
| institution | Directory Open Access Journal |
| issn | 2667-1115 |
| language | English |
| last_indexed | 2024-03-08T23:09:29Z |
| publishDate | 2023-07-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Asia and the Global Economy |
| spelling | doaj.art-727a366efb73455f97f77115d26129d32023-12-15T07:27:03ZengElsevierAsia and the Global Economy2667-11152023-07-0132100062Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countriesMd Aslam Mia0Adamu Jibir1Arpita Sharma2Musa Abdu3School of Management, Universiti Sains Malaysia, 11800, Penang, Malaysia; Corresponding author.Department of Economics, Gombe State University, 760214, Gombe, NigeriaSymbiosis Institute of Business Management Pune, Symbiosis International University, Pune 412115, IndiaDepartment of Economics, Gombe State University, 760214, Gombe, NigeriaIn order for microfinance institutions (MFIs) to significantly impact the society, they must achieve both financial sustainability and outreach goals simultaneously. However, when MFIs prioritize financial sustainability at the expense of their outreach goals, it is regarded as mission drift. This study introduces the concept of the Kuznets curve hypothesis to explain the occurrence of mission drift in MFIs. By analysing data from 1,323 unique MFIs across 105 emerging countries, between 2010 and 2018, our findings corroborate the existence of the Kuznets curve for outreach and financial goals. The findings demonstrate that MFIs initially prioritize their outreach goal of serving more female clients but gradually shift focus towards financial performance as they expand and accumulate fixed assets. Moreover, we also empirically quantified the critical asset size of MFIs beyond which they are less likely to achieve their outreach and financial sustainability goals. The implications of these findings for policy are also discussed.http://www.sciencedirect.com/science/article/pii/S2667111523000099Kuznets curvefinancial sustainabilityoutreachmission driftmicrofinance institutionsoperational-self-sufficiency |
| spellingShingle | Md Aslam Mia Adamu Jibir Arpita Sharma Musa Abdu Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries Asia and the Global Economy Kuznets curve financial sustainability outreach mission drift microfinance institutions operational-self-sufficiency |
| title | Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries |
| title_full | Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries |
| title_fullStr | Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries |
| title_full_unstemmed | Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries |
| title_short | Can Kuznets curve hypothesis explain the mission drift of microfinance institutions? Evidence from developing countries |
| title_sort | can kuznets curve hypothesis explain the mission drift of microfinance institutions evidence from developing countries |
| topic | Kuznets curve financial sustainability outreach mission drift microfinance institutions operational-self-sufficiency |
| url | http://www.sciencedirect.com/science/article/pii/S2667111523000099 |
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