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On the Social and Financial Effects of the Transformation of Microfinance NGOs

  • S. ChahineEmail author
  • L. Tannir
Original Paper

Abstract

This article examines the social and financial performance of an international sample of non-governmental organizations (NGOs) which transformed into microfinance institutions (TMFI). It shows that recent calls for the transformation of NGOs into TMFIs help improve the financial sustainability and the breadth of outreach of microfinance activities. However, this transformation hinders the depth of the services provided by TMFIs. This is especially significant in the case of bank-TMFIs and suggests that although the transformation might increase the financial independence of TMFIs, it might cause a mission drift that both NGOs and policy-makers ought to consider.

Keywords

NGOs Microfinance Social performance Financial performance 

Résumé

Le présent document étudie les performances sociales et financières d’un échantillon international d’organisations non gouvernementales (ONG), qui sont devenues des institutions de microfinance (IMF). Il démontre que les demandes récentes de transformation des ONG en IMF permettent d’améliorer la viabilité financière et l’étendue de la portée des activités de microfinance. Pourtant, cette transformation représente un obstacle à l’approfondissement des services apportés par les IMF. Cet aspect est particulièrement significatif dans le cas des IMF bancaires, et donne à penser qu’en dépit du fait que cette transformation pourrait accroître l’indépendance financière des IMF, elle est également susceptible de provoquer la dérive de la mission dont doivent tenir compte les ONG et les responsables politiques.

Zusammenfassung

Dieser Beitrag untersucht beispielhaft die sozialen und finanziellen Leistungen einiger nicht-staatlicher Organisationen in verschiedenen Ländern, die in Mikrofinanzinstitutionen umgewandelt wurden. Es wird dargelegt, dass die jüngsten Forderungen nach der Umwandlung nicht-staatlicher Organisationen in Mikrofinanzinstitutionen die finanzielle Nachhaltigkeit fördern und die Reichweite der Mikrofinanzaktivitäten vergrößern können. Allerdings begrenzt diese Umwandlung das Dienstleistungsspektrum der betroffenen Mikrofinanzinstitutionen. Dies ist insbesondere von Bedeutung für die umgewandelten Mikrofinanzinstitutionen, die zugleich Banken sind, und lässt darauf schließen, dass, obgleich die Umwandlung zu einer erhöhten finanziellen Unabhängigkeit der Mikrofinanzinstitutionen führen kann, unter Umständen jedoch vom ursprünglichen Zweck abgewichen wird. Dies sollte sowohl von den nicht-staatlichen Organisationen als auch von den Entscheidungsträgern berücksichtigt werden.

Resumen

El presente trabajo analiza los resultados sociales y financieros de un grupo internacional de organizaciones no gubernamentales (ONG) que se han transformado en instituciones de microfinanzas (en adelante, IMFT). El trabajo demuestra que los recientes llamamientos para la transformación de las ONG en IMFT ayudan a mejorar la sostenibilidad financiera y la amplitud de alcance de las actividades microfinancieras. No obstante, esta transformación limita la profundidad de los servicios prestados por las IMFT, circunstancia que es especialmente significativa en el caso de las IMFT bancarias y sugiere que, aunque la transformación podría aumentar la independencia financiera de las IMFT, podría también ocasionar un cambio de misión que deberían tener en cuenta tanto las ONG como los políticos.

摘要

本论文研究那些非政府组织 (NGO) 转化成小额信贷机构 (Transformation of Micro-finance institutions,以下缩写为 TMFI) 后在社会和财务业绩方面的一个国际选样。论文表明,最近在 NGO 的 TMFI 转化方面的呼吁,有助于改进小额信贷活动在财政方面的可持续性及其扩展服务面的广度。然而,该转化也阻碍了 TMFI 提供服务的深度。 这在银行与 TMFI 之间关系方面尤其明显,并表明了尽管该转化可能增加 TMFI 的财务独立性,但也可能造成一个 NGO 以及政策制定者双方都应该予以考虑的使命偏离。

要約

本論文では、非政府団体(NGO)から変更したミクロ財政団体(これ以降、TMFI)の国際的なサンプルをもとにして、社会的・財政的実績を研究する。NGOからTMFIへの変更を公表したことによって、財政的な持続性とミクロ財政活動における奉仕活動の枠組みの改善に役立つことが示される。しかしながら、この変更はTMFIが提供したサービスの枠組みを妨害することにもなる。特に、銀行とTMFIの間では重要であり、変更によってTMFIからの財政的な独立を促す可能性はあるが、NGOと政策立案者の両方が考慮する必要性を持つことになる。

ملخص

يفحص هذا البحث الأداء الإجتماعي والمالي لعينة دولية للمنظمات الغيرحكومية(NGOs) التي تحولت إلى مؤسسات التمويل الصغير (من الآن فصاعدا ،TMFI). يبين أن الدعوة الأخيرة إلى تحول المنظمات الغير حكومية(NGOs) إلى مؤسسات التمويل الصغير(TMFIs) يساعد في تحسين الإستدامة المالية وإتساع نطاق أنشطة تمويل المشاريع الصغيرة. مع ذلك، هذا التحول يعوق عمق الخدمات التي تقدمها مؤسسات التمويل الصغير(TMFIs). هذا أمر مهم لا سيما في حالة المصرف- مؤسسات التمويل الصغير(TMFIs)، ويشير إلى أن على الرغم من أن التحول قد يزيد من الاستقلال المالي لمؤسسات التمويل الصغير (TMFIs)، فإنه قد يتسبب في انحراف المهمة التي يجب أن ينظر فيها كلاً من المنظمات الغير حكومية (NGOs) وواضعي السياسات.

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Copyright information

© International Society for Third-Sector Research and The John's Hopkins University 2010

Authors and Affiliations

  1. 1.The Suliman Olayan School of BusinessAmerican University of BeirutBeirutLebanon

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