A New Index of the Business Environment for Microfinance
This paper describes a new index of the quality of the business environment for microfinance institutions (the Global Microscope on the Microfinance Business Environment). Regressions are used to validate the index by linking it and its subcomponen...
| Main Authors: | , , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/09/18321957/new-index-business-environment-microfinance http://hdl.handle.net/10986/16843 |
| Summary: | This paper describes a new index of the
quality of the business environment for microfinance
institutions (the Global Microscope on the Microfinance
Business Environment). Regressions are used to validate the
index by linking it and its subcomponents to microfinance
outcomes. The main findings are that the components of the
index related to the supporting institutional framework are
strongly linked to measures of microfinance penetration
(such as microfinance borrowers as a share of total
population). Components related to the framework for
regulation and supervision are more strongly linked to
outcomes at the microfinance institution level, including
loan portfolio quality, financial self-sufficiency, average
loan size, and the share of lending to women. Many, but not
all, of these relationships are robust to using instrumental
variables estimation in which a country's general
stringency with respect to financial regulation is used as
an instrument for the index and its components. |
|---|