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Our study focuses on the presence of international shareholders in microfinance institutions.Using data from 148 Microfinance Institutions (MFIs) in 51 countries, we empirically determine MFI characteristics that relate to presence of international shareholders. Exception: invalid or missing parameters at Prog PDFServlet.handle Call(Prog PDFServlet.java:430) at Prog Get(Prog PDFServlet.java:64) at javax.
This reiterates that there is a growing international equity funding for MFIs and that international equity is playing a remarkable role in financing the rising growth of the microfinance industry.
Concerning the characteristics of MFIs, we find that shareholder MFIs that have international shareholders have high international orientation.
We also investigate the influence of international shareholders on the overall financial performance of MFIs and operating cost.
We find that 53% of MFIs that are shareholder owned have international shareholders.
These findings are robust and as well, they are empirically and theoretically supported.
The findings should however be generalized with caution.We therefore conclude that the presence of international shareholders has a negative influence on overall financial performance of MFIs.In addition, MFIs that have international shareholders have higher operating cost profiles in the form of administrative and personnel costs.Application Filter Filter(Application Filter Chain.java:210) at org.apache.Standard Wrapper Valve.invoke(Standard Wrapper Valve.java:224) at org.apache.This is because, as literature suggests, performance improvements that result from having international shareholders may take time to realize and as well operating costs may be low in later years due to learning effects.JIo Endpoint$Socket Processor.run(JIo Endpoint.java:309) at concurrent. Thread Pool Worker(Thread Pool Executor.java:1142) at concurrent.Also, these MFIs often use village banking lending methodology, have higher outreach in terms of number of credit clients and usually serve urban markets.Regarding financial performance, we find that MFIs that have international shareholders are less profitable and less efficient in terms of ROE and ratio of cost to income respectively.Coyote Adapter.service(Coyote Adapter.java:407) at org.apache.coyote.http11. Abstract Http11Processor.process(Abstract Http11Processor.java:987) at org.apache.coyote. Abstract Protocol$Abstract Connection Handler.process(Abstract Protocol.java:579) at org.apache.net.JIo Endpoint$Socket Processor.run(JIo Endpoint.java:307) at concurrent. Thread Pool Worker(Thread Pool Executor.java:1142) at concurrent.