Since start-up in 1997 I have been involved in
the microfinance bank BANCO D-MIRO in Ecuador. Many stakeholders have assessed
our performance. Especially international lenders and rating agencies. What has
always annoyed me is that they have repeatedly told us that we should diversify
our geographical risk by entering more regions. I have fought against this
recommendation because I think it requires more coordination resources to
operate with larger geographical outspread. Moreover, I think geographical concentration
gives us improved market knowledge. This background has motivated me to carry
out this new research project together with my colleagues Stephen Zamore and
Leif Atle Beisland. In the paper we are the first to study the link between
geographic diversification and credit risk in microfinance. Who was right? I or
the rating agencies? Check out the paper!
(P.S. since we use a large global dataset it
could still be that the rating agencies are right in the case of Banco D-MIRO 😊)
for Research on Social Enterprises and Microfinance (CERSEM)
Into what type of developing
countries do social enterprises expand when going international? Do they select
markets where they have a better chance of achieving social returns or do they
expand into countries offering better chances of financial returns?
In a new paper we examine how
host countries’ macroeconomic conditions influence international market
selection of European and American impact investing organizations.
Mersland, R., Nyarko, S., & Sirisena, A. (Forthcoming), “A Hybrid Approach to International Market Selection: The Case of Impact Investing Organizations”, International Business Review.
Do you know what savings groups are, how they are structured, how they perform and where they flourish? In fact, saving groups are one of the World’s largest banking systems. Here at CERSEM, we find savings groups fascinating and have therefore initiated a large new project where we will research what drives the performance of these groups. The project is sponsored by FAHU foundation and we have gotten access to the SAVIX database covering 250 thousand groups worldwide. Our first output is a descriptive report on the content in the SAVIX database. Read the report and learn about savings groups.
Europe’s largest microfinance newsletter – The Microfinance Platform – has a long article reviewing our paper on Mission Statements in Microfinance. You can read the article here: https://lnkd.in/gHnBEiN The full article can be requested here: https://lnkd.in/gRcK8n2
In our most recent paper accepted for publication in Journal
of World Business we study whether knowledge of a world language like English,
Spanish and French have an influence on the performance of Microfinance
Institutions (MFIs). And indeed it has. After controlling for country effects
etc. we find that MFIs operating in English/Spanish/French-speaking countries
have higher performance than MFIs operating in other markets. Moreover, we find
that language also has an effect on partnerships between MFIs and international
partners in Europe and North America. A closer language relationship between
the international partner and the MFI has a positive effect on the MFI’s
performance. We think our study is of relevance also outside the microfinance
context. You can download and read the full study here: https://authors.elsevier.com/c/1Ypmi3u3RtdUg6
Happy to announce our latest research which I think is novel. We are the first to study “mission statements” of Microfinance Institutions (MFIs) and assess whether MFIs “walk the talk”. To our surprise only one fifth of MFIs mention in their mission statements that they focus on women. However, the results show a significant coherence between what MFIs say in their mission statements and what they do in practice, suggesting that “missions drift” is no serious concern in the microfinance industry. You can download and read the full paper here:
At CERSEM we are very proud these days. On Thursday 13th of December two of our PhD students successfully defended their theses. We are also very thankful to FAHU foundation for funding their studies. Stephen Zamore and Kwame Djan, both from Ghana, have been brilliant students finishing their theses in only three years. Stephen has now been hired by us in a postdoc position. Kwame is in the job market so let us know if you are hiring. Both Stephen and Kwame have already published several interesting studies like this one by Stephen on whether it is beneficial for MFIs to integrate nonfinancial in their business models https://lnkd.in/dcD7bG8 and this one by Kwame on whether Christian MFIs are governed differently than secular MFIs https://lnkd.in/g4vZFBB.
Let us also take the opportunity to wish you a Merry Christmas. Stay posted in 2019 for more news from the Center for Research on Social Enterprises and Microfinance.
In the second paper, published in Strategic Change we observe that the capital structure of the MFIs varies a lot. Some have easy access to international funding while others struggle in getting into international investors’ pockets. At the same time, some MFIs are strong in mobilizing local deposits while others are weak. In this paper, we look at the experience of the CEO and how this influence the capital structure of the MFI. Check it out: https://www.researchgate.net/publication/327229255_Capital_structure_and_CEO_tenure_in_microfinance_institutions
The first, published in International Business Review, is about the geographical and cultural distance between MFIs and their international partners. We observe that MFIs have lots of international partners. In this paper, we study whether it matters from where the international partners come from.
Are some partnerships more effective than other partnerships?
Dear research colleague
I kindly remind about the following call for papers for our Oslo research workshop:
Organizers: Oslo Business School at Oslo Metropolitan University and CERSEM at the University of Agder, Norway
Topic “The Business and Finance of Microfinance”.
Place and time: Oslo, Norway, 27-28 September 2018
We aim at creating a special issue in a well-known finance journal for publication of the best papers from the workshop.
Only 20 papers will be accepted for presentation. The main selection criteria is the scientific quality of the paper. Unpolished working papers are fine as long as they have potential to become a top publication.
All papers must be of interest to the microfinance community as well as for a wider community of finance and banking scholars.
Scientific committee: Niels Hermes (University of Groningen, Netherlands), Roy Mersland (Director CERSEM, University of Agder, Norway) and R. Øystein Strøm (Oslo Metropolitan University, Norway).