Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 32578
Cultural Effects on the Performance of Non- Profit and For-Profit Microfinance Institutions

Authors: Patrick M. Stanton, William R. McCumber


Using a large dataset of more than 2,400 individual microfinance institutions (MFIs) from 120 countries from 1999 to 2016, this study finds that nearly half of the international MFIs operate as for-profit institutions. Formal institutions (business regulatory environment, property rights, social protection, and a developed financial sector) impact the likelihood of MFIs being for-profit across countries. Cultural differences across countries (power distance, individualism, masculinity, and indulgence) seem to be a factor in the legal status of the MFI (non-profit or for-profit). MFIs in countries with stronger formal institutions, a greater degree of power distance, and a higher degree of collectivism experience better financial and social performance.

Keywords: Hofstede cultural dimensions, international finance, microfinance institutions, non-profit.

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 884


[1] Roberts, Peter W. "The profit orientation of microfinance institutions and effective interest rates." World Development41 (2013): 120-131.
[2] Morduch, Jonathan. "The microfinance schism." World development 28.4 (2000): 617-629.
[3] Mersland, Roy, and Reidar Øystein Strøm. "Performance and trade‐offs in Microfinance Organisations—Does ownership matter?." Journal of International Development: The Journal of the Development Studies Association 20.5 (2008): 598-612.
[4] Yunus, Muhammad. "Sacrificing microcredit for megaprofits." New York Times 14.3 (2011): A23.
[5] Mersland, Roy, and R. Øystein Strøm. "Microfinance mission drift?." World Development 38.1 (2010): 28-36.
[6] Copestake, James. "Mainstreaming microfinance: Social performance management or mission drift?." World development 35.10 (2007): 1721-1738.
[7] Bahree, Megha. “Microfinance Or Loan Sharks? Grameen Bank And SKS Fight It Out.” Forbes. September 21, 2010.
[8] CompartamosBanco.