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The impact of COVID-19 on the efficiency of microfinance institutions

Zheng, C. and Zhang, J. (2021) The impact of COVID-19 on the efficiency of microfinance institutions. International Review of Economics & Finance, 71 . pp. 407-423.

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This study investigates the effect of the COVID-19-induced decline in economic activities on the financial and social efficiency of microfinance institutions (MFIs). We find that the pandemic-induced impact decreases the financial efficiency of MFIs; however, the social efficiency of MFIs is increased under the impact of COVID-19. To explore potential channels through which efficiency is influenced by the COVID-19 outbreak, we examine the supply and demand side of MFIs’ funding. We find that the lending rate mediates the relationship between the impact of COVID-19 and MFI efficiency, whereas the mediating role of the funding rate is negligible.

Item Type: Journal Article
Murdoch Affiliation: Murdoch Business School
Publisher: Elsevier Inc.
Copyright: © 2020 Elsevier Inc.
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