Publication:
Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?

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dc.contributor.authorCull, Robert
dc.contributor.authorDemirgüç-Kunt, Asli
dc.contributor.authorMorduch, Jonathan
dc.date.accessioned2012-03-19T19:10:38Z
dc.date.available2012-03-19T19:10:38Z
dc.date.issued2009-06-01
dc.description.abstractRegulation allows microfinance institutions to evolve more fully into banks, particularly for institutions aiming to take deposits. But there are potential trade-offs. Complying with regulation and supervision can be costly. The authors examine the implications for the institutions profitability and their outreach to small-scale borrowers and women. The tests draw on a new database that combines high-quality financial data on 245 of the world s largest microfinance institutions with newly-constructed data on their prudential supervision. Ordinary least squares regressions show that supervision is negatively associated with profitability. Controlling for the non-random assignment of supervision via treatment effects and instrumental variables regressions, the analysis finds that supervision is associated with substantially larger average loan sizes and less lending to women than in ordinary least squares regressions, although it is not significantly associated with profitability. The pattern is consistent with the notion that profit-oriented microfinance institutions absorb the cost of supervision by curtailing outreach to market segments that tend to be more costly per dollar lent. By contrast, microfinance institutions that rely on non-commercial sources of funding (for example, donations), and thus are less profit-oriented, do not adjust loan sizes or lend less to women when supervised, but their profitability is significantly reduced.en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090601114132
dc.identifier.doi10.1596/1813-9450-4948
dc.identifier.urihttps://hdl.handle.net/10986/4139
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research Working Paper ; No. 4948
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO FINANCE
dc.subjectACCOUNTING
dc.subjectADMINISTRATIVE COSTS
dc.subjectAFFILIATE
dc.subjectASSET MANAGEMENT
dc.subjectASSET PORTFOLIOS
dc.subjectAVERAGE COSTS
dc.subjectBALANCE SHEET
dc.subjectBANK LENDER
dc.subjectBANK LENDING
dc.subjectBANK POLICY
dc.subjectBANK REGULATION
dc.subjectBANK RESTRUCTURING
dc.subjectBANK SUPERVISION
dc.subjectBANKERS ASSOCIATION
dc.subjectBANKING INDUSTRY
dc.subjectBANKING LAW
dc.subjectBANKING REGULATIONS
dc.subjectBANKS
dc.subjectBIG BANK
dc.subjectBIG BANKS
dc.subjectBORROWING
dc.subjectBUDGET CONSTRAINTS
dc.subjectCALCULATIONS
dc.subjectCAPITAL COSTS
dc.subjectCHECKS
dc.subjectCOMMERCIAL BORROWING
dc.subjectCOMMUNITY BANKS
dc.subjectCOMPLIANCE COSTS
dc.subjectCONSUMER
dc.subjectCONSUMER CREDIT
dc.subjectCONSUMER PROTECTION
dc.subjectCONSUMER PROTECTION LAWS
dc.subjectCONVENTIONAL BANK
dc.subjectCONVENTIONAL BANK LOANS
dc.subjectCOOPERATIVES
dc.subjectCREDIT INFORMATION
dc.subjectCREDIT INFORMATION SYSTEMS
dc.subjectCREDIT RISK
dc.subjectCREDIT UNIONS
dc.subjectDEPOSIT
dc.subjectDEPOSIT INSURANCE
dc.subjectDEPOSITORS
dc.subjectDEPOSITS
dc.subjectDEPRECIATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDIVIDENDS
dc.subjectDUMMY VARIABLE
dc.subjectDUMMY VARIABLES
dc.subjectEARNINGS
dc.subjectECONOMIES OF SCALE
dc.subjectELECTRONIC FUND
dc.subjectEMPLOYEE
dc.subjectEQUAL AMOUNT
dc.subjectEQUAL CREDIT
dc.subjectEQUAL CREDIT OPPORTUNITY
dc.subjectEQUATIONS
dc.subjectEXCLUSION
dc.subjectEXOGENOUS VARIABLES
dc.subjectEXPENSE RATIOS
dc.subjectEXTERNAL AUDITORS
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE SYSTEM
dc.subjectFINANCIAL DATA
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFINANCIAL INFORMATION
dc.subjectFINANCIAL INSTITUTION
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectFINANCIAL PERFORMANCE
dc.subjectFINANCIAL POSITION
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL SECTOR POLICY
dc.subjectFINANCIAL SELF-SUFFICIENCY
dc.subjectFINANCIAL SELF-SUSTAINABILITY
dc.subjectFINANCIAL SERVICES
dc.subjectFINANCIAL STATEMENT
dc.subjectFINANCIAL STATEMENTS
dc.subjectFINANCIAL SYSTEM
dc.subjectFINANCIAL SYSTEMS
dc.subjectFIXED ASSETS
dc.subjectFORMAL FINANCIAL INSTITUTIONS
dc.subjectFRAUD
dc.subjectFUNDING SOURCES
dc.subjectFUTURE RESEARCH
dc.subjectGENERAL PUBLIC
dc.subjectGNP
dc.subjectGNP PER CAPITA
dc.subjectHIGH INTEREST RATES
dc.subjectHOUSEHOLDS
dc.subjectINCOME STATEMENTS
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectINFORMATION SERVICES
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectINSTRUMENT
dc.subjectINSURANCE AGENCY
dc.subjectINTEREST INCOME
dc.subjectINTEREST PAYMENTS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectJOINT LIABILITY
dc.subjectLABOR COSTS
dc.subjectLARGE BANKS
dc.subjectLENDER
dc.subjectLENDERS
dc.subjectLINES OF CREDIT
dc.subjectLOAN
dc.subjectLOAN OFFICERS
dc.subjectLOAN PORTFOLIO
dc.subjectLOAN QUALITY
dc.subjectLOAN SIZE
dc.subjectLOAN SIZES
dc.subjectLOANS TO INDIVIDUALS
dc.subjectLOANS TO WOMEN
dc.subjectLONG-TERM LIABILITIES
dc.subjectMACROECONOMIC CONTEXT
dc.subjectMACROECONOMIC CONTROLS
dc.subjectMARKET INTEREST RATES
dc.subjectMFI
dc.subjectMFIS
dc.subjectMICROCREDIT
dc.subjectMICROENTERPRISES
dc.subjectMICROFINANCE
dc.subjectMICROFINANCE INSTITUTION
dc.subjectMICROFINANCE INSTITUTIONS
dc.subjectMICROFINANCE REGULATION
dc.subjectNET OPERATING INCOME
dc.subjectNET PROFIT
dc.subjectNON-PERFORMING LOANS
dc.subjectNONPERFORMING LOANS
dc.subjectOPERATING COST
dc.subjectOPERATING EXPENSES
dc.subjectOPERATING REVENUE
dc.subjectORGANIZATIONAL STRUCTURE
dc.subjectORGANIZATIONAL STRUCTURES
dc.subjectOUTREACH
dc.subjectOWNERSHIP STRUCTURE
dc.subjectPER CAPITA INCOME
dc.subjectPOOR BORROWERS
dc.subjectPORTFOLIO QUALITY
dc.subjectPRIVATE BANKS
dc.subjectPROFITABILITY
dc.subjectPRUDENTIAL REGULATION
dc.subjectPRUDENTIAL REGULATIONS
dc.subjectPRUDENTIAL SUPERVISION
dc.subjectRAPID GROWTH
dc.subjectRATE OF INTEREST
dc.subjectREAL GDP
dc.subjectREAL INTEREST
dc.subjectREGIONAL DUMMIES
dc.subjectREGIONAL DUMMY
dc.subjectREGULATORY AUTHORITIES
dc.subjectREGULATORY AUTHORITY
dc.subjectREORGANIZATION
dc.subjectREPAYMENT
dc.subjectREPAYMENT RATES
dc.subjectRESERVES
dc.subjectRETAINED EARNINGS
dc.subjectRETURN
dc.subjectRETURN ON ASSETS
dc.subjectRETURNS
dc.subjectRURAL BANKS
dc.subjectSAVINGS
dc.subjectSENIOR
dc.subjectSHAREHOLDER
dc.subjectSHAREHOLDERS
dc.subjectSMALL LOANS
dc.subjectSOLIDARITY LENDING
dc.subjectSOURCES OF FUNDS
dc.subjectSTART-UP
dc.subjectSTART-UP COSTS
dc.subjectSUPERVISORY AGENCY
dc.subjectSUPERVISORY AUTHORITIES
dc.subjectSUPERVISORY AUTHORITY
dc.subjectSUPERVISORY POWERS
dc.subjectTAX
dc.subjectTECHNICAL ASSISTANCE
dc.subjectTIME DEPOSITS
dc.subjectVILLAGE
dc.subjectVOLUNTARY DEPOSITS
dc.subjectWOMEN BORROWERS
dc.titleDoes Regulatory Supervision Curtail Microfinance Profitability and Outreach?en
dspace.entity.typePublication
okr.crossref.titleDoes Regulatory Supervision Curtail Microfinance Profitability And Outreach?
okr.date.doiregistration2025-04-10T12:16:50.179407Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090601114132
okr.guid487411468320662382
okr.identifier.doi10.1596/1813-9450-4948
okr.identifier.externaldocumentum000158349_20090601114132
okr.identifier.internaldocumentum10618928
okr.identifier.reportWPS4948
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2009/06/01/000158349_20090601114132/Rendered/PDF/WPS4948.pdfen
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication234a20c0-893c-561a-8c90-6f5be5be5b9b
relation.isAuthorOfPublication.latestForDiscovery234a20c0-893c-561a-8c90-6f5be5be5b9b
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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