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Globalization and Microfinance performance: Evidence from Sub-Saharan Africa MFIs

par Bahati Mukulu, Joseph
Président du jury Labie, Marc
Promoteur Labie, Marc
Publication Non publié, 2020-08-27

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Résumé :

Microfinance institutions (MFIs) evolve in a wide ecosystem. For longer, it has been asserted that they are free of global (worldwide) movements. Several scholars have rejected this assertion showing that these movements influence MFIs, as a feature of financial system. This study follows up these researches by assessing the effect of globalization on the MFIs performance in SSA. Data are from four databases (the mix-market, the KOF Globalization, the WDI and the WGI) and encompass 439 MFIs from 34 SSA countries over 13 years (2005-2017). Data are processing through the system GMM model and five models are carried-out for each indicator of the MFIs performance. The MFIs performance is measured through its two dimensions: financial performance (ROA and OSS) and social performance (NAB and ALS), and globalization through its sub-dimensions: economic globalization (trade openness and financial liberalization), social globalization and political globalization.Results reveal that the SSA countries have an intermediate level of globalization and SSA MFIs are not profitable but are sustainable. They also show that these MFIs are less efficient in term of portfolio quality. Econometric estimations reveal that globalization has heterogeneous effects on the performance of MFIs. Its dimensions have different effects on MFIs performance indicators. These results go against the assertion of Krauss & Walker (2009) supporting MFIs are free of global movements. However, they comfort the Rajan and Zingales (2003) and the Kendo & Eboue (2016) who, respectively, argu the simultaeonous effect of the dimensions of globalizaiton and the opposite effect of globalization on the aspects of the MFIs outreach.