Determinants of non-performing loan of microfinance institutions: The case of lower-middle-income countries.
Main Article Content
Abstract
The study is conducted to assess the impact of several factors on the Non-performing Loan of microfinance institutions (MFIs) in 26 low middle-income countries in 2014-2017. The research results show that the size of MFIs, the number of borrowers, total assets and the ratio of debt to equity harm the credit risk control of MFIs. In contrast, Female borrowers, borrowers in rural areas and the number of branches have a positive impact on reducing NPLs of MFIs. This implies that specialized agencies in these countries should strengthen the supervision of MFIs with low equity capital to ensure the stable and sustainable operation of the microfinance system. Besides, MFIs should consider promoting lending to female groups, which benefits MFIs and has a positive social impact, as it helps women have opportunities to enhance their role in society.
Article Details
Keywords
Microfinance institutions, Credit risk, Lower-middle-income countries
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