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2021-12-17 - Colloque/Présentation - communication orale - Anglais - 25 page(s)

Caballero-Montes Tristan , Labie Marc , "How does regulation affect microfinance institutitons? Insights from the 2012-2014 regulatory strengthening in Benin ?" in World Finance Banking Symposium, online, 2021

  • Codes CREF : Economie des PVD (DI4375), Management (DI4360)
  • Unités de recherche UMONS : Economie et gestion de l'entreprise (W742)
  • Instituts UMONS : Institut de Recherche en Développement Humain et des Organisations (HumanOrg)
  • Centres UMONS : Inclusion sociale (CERIS), Microfinance (CERMI)

Abstract(s) :

(Anglais) Although regulation has developed dramatically since microfinance emerged, the literature is still questioning how it affects microfinance institutions. Some studies argue that regulation can support both financial and social performance, whereas others highlight that it favors the commercial mindset of microfinance institutions, and still others do not detect any direct effect. In this paper, we study the introduction of a stricter microfinance regulatory framework in Benin in 2012-2014. Using graphical analyses, hypothesis tests, and an event study, we analyze the evolution of financial performance, social outreach, and market dynamics indicators. Our findings suggest that, following the regulatory strengthening, sustainability deteriorated, and funding costs dropped. The analysis also suggests that regulation contributed neither to the improvement social outreach, nor to the diversification of the market, although these were among the objectives of the regulatory framework.