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Security design, incentives, and Islamic microfinance: Cross country evidence

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journal contribution
posted on 05.02.2020, 09:07 by Yaoyao 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

Volume

62

Pages

264 - 280

Publisher

Elsevier BV

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier B.V.

Publisher statement

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.

Acceptance date

16/08/2019

Publication date

2019-08-17

Copyright date

2019

ISSN

1042-4431

Language

en

Depositor

Prof Hong Liu. Deposit date: 4 February 2020