posted on 2020-02-05, 09:07authored byYaoyao Fan, Kose John, Hong LiuHong Liu, Luqyan Tamanni
We provide cross country evidence from microfinance institutions (MFIs) that are Sharia-compliant and their comparisons with non-Sharia-compliant MFIs. We find that, compared with non-Sharia-compliant conventional MFIs, Sharia-compliant Islamic MFIs have less credit risk but are less profitable and financially sustainable, have better poverty outreach, and are less likely to ‘mission drift’. Our results highlight the differences in religiosity and security design between these two institutions. Our study also helps practitioners and policy makers improve the understanding of the difference between conventional and Islamic MFIs.
History
School
Business and Economics
Department
Business
Published in
Journal of International Financial Markets, Institutions and Money
This paper was accepted for publication in the journal Journal of International Financial Markets, Institutions and Money and the definitive published version is available at https://doi.org/10.1016/j.intfin.2019.08.002.