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Erschienen in: Journal of Business Ethics 3/2017

09.08.2015

Factors Influencing Microfinance Engagements by Formal Financial Institutions

verfasst von: Tzu-Kuan Chiu

Erschienen in: Journal of Business Ethics | Ausgabe 3/2017

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Abstract

The commercialization of microfinance brings formal financial institutions into the microfinance landscape, yet little is known about the forces that lead to this phenomenon. This paper is the first dedicated to this topic using a hand-collected dataset of 112 institutions from 34 countries covering the period from 2008 to 2012. Based on institutional theory and resource-based argument, we empirically assess the effects of institutional environment factors, including regulative, normative, and cognitive elements, as well as resource-based factors, including practice model and multinational diversity, on the intensity of engagements. To do so, we define the roles as capital-related, product-related, and service delivery, and calculate engagement intensity using a scoring method which reflects an organization’s extent of presence in the microfinance value chain. The analysis takes the engaging location (domestic or overseas) and engaging model (connected or unconnected to core business) into account. We find that the two logics together can explain such involvement. Legal compliance is identified as most relevant for domestic players, while resource-based factors are more relevant for overseas players. In addition to regression analysis, many cases are identified to support the arguments.

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Fußnoten
1
RG&FSSS was formally launched in 2008, yet a few FIs adopted an earlier version in the pilot stage, including Generali, Citi, Deutsche Bank, Nordea Bank, and Bancaja Group.
 
2
The best way is to divide the sample into three mutually exclusive groups: 'domestic only,' 'overseas only,' and 'both overseas and domestic.' However, this division reduces the number of FIs in each group which may generate problems for regressions, hence the two-group division is used instead. The current division still reflects the facts well. Taking Citi to illustrate, it is involved both at home and abroad, but the scale of domestic operation (a hundred cases a year) can be reasonably ignored when compared to overseas operation (several million cases a year). Similar cases are found in Deutsche Bank, Allianz, Credit Suisse, JP Morgan, ING Group, Raiffeisen-Leasing, and Rabobank.
 
3
Explicit statements include 'Microfinance is not a charity or donation…. It is a viable business case' (Allianz, 2012), and 'Micro-insurance….the business with the double-bottom line' (Allianz, 2011).
 
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Metadaten
Titel
Factors Influencing Microfinance Engagements by Formal Financial Institutions
verfasst von
Tzu-Kuan Chiu
Publikationsdatum
09.08.2015
Verlag
Springer Netherlands
Erschienen in
Journal of Business Ethics / Ausgabe 3/2017
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-015-2811-1

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