Security design, incentives, and Islamic microfinance

Cross country evidence

Yaoyao Fan, Kose John, Frank Hong Liu (Corresponding Author), Luqyan Tamannid

Research output: Contribution to journalArticle

Abstract

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.
Original languageEnglish
Pages (from-to)264-280
Number of pages17
JournalJournal of International Financial Markets, Institutions and Money
Volume62
Early online date17 Aug 2019
DOIs
Publication statusPublished - Sep 2019

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Microfinance
Security design
Incentives
Microfinance institutions
Poverty
Politicians
Credit risk
Religiosity
Outreach

Keywords

  • microfinance institutions
  • Sharia-compliant product
  • Islamic
  • security design
  • religiosity
  • cross country
  • Microfinance institutions
  • Security design
  • Religiosity
  • Cross country
  • MATTER
  • GOVERNANCE
  • CORPORATE SOCIAL-RESPONSIBILITY
  • PERFORMANCE
  • RISK
  • INSTITUTIONS
  • CAPITAL STRUCTURE
  • RELIGION
  • BANKS
  • EFFICIENCY

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Security design, incentives, and Islamic microfinance : Cross country evidence. / Fan, Yaoyao ; John, Kose; Liu, Frank Hong (Corresponding Author); Tamannid, Luqyan .

In: Journal of International Financial Markets, Institutions and Money, Vol. 62, 09.2019, p. 264-280.

Research output: Contribution to journalArticle

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