Anti-Corruption and Financial Performance Determinants of Microfinance Institutions in the MENA Region

Abstract

The performance of microfinance institutions is always influenced by different factors. It has remained, until recent years, a hot topic among researchers. In our paper, we are particularly interested in studying the determinants of the financial performance of microfinance institutions by taking into consideration the effect of anti-corruption measures. To do this, we selected 29 microfinance institutions distributed across 8 developing countries in the MENA region over the period from 2009 to 2018. We suggest a dynamic panel regression (Generalized Method of Moments: GMM) in which the performance of microfinance institutions is evaluated based on two key measures: return on assets (ROA) and operational self-sufficiency (OSS). Our findings indicate that financial performance of microfinance institutions is positively affected by corruption control and liquidity, while it is negatively influenced by the level of portfolio at risk.