Microfinance in Latin America and the Caribbean: The influence of territory on female repayment performance in a polarized region

Abstract

Purpose

The authors aim to examine how macro, meso and micro territorial boundaries influence the loan repayment performance of female clients of mega microfinance institutions (MFIs) operating in a polarized Latin America and the Caribbean (LAC).

Design/methodology/approach

The study uses panel data (random effect analysis) comprising seven years and 407 MFIs of LAC.

Findings

The repayment performance of MFIs' female clients in LAC is meso and micro territorially bounded. It is positively influenced by the urbanization and gender inequality levels of the LAC countries, and by the number of loans per MFI loan officer.

Research limitations/implications

Data concerning the risk of the businesses women invested in, or data related to women's access to credit, were not included; high heterogeneity in large countries must be taken into account. The authors' findings expand the understanding of territorial boundary conditions concerning female clients' repayment performance and extend the prior literature on the subject.

Practical implications

The authors' findings suggest that the MFIs operating in LAC should increase their number of loan officers. The MFIs of the Mexico-led cluster may also seek a better balance between female and male clients, since hiring more loan officers may be impracticable for them.

Originality/value

The authors empirically challenge the widely accepted assumption that female clients are always the best choice for MFIs. They also unfold territorial boundaries conditioning these clients' performance.

Citation

Antonio Bittencourt Marconatto, D., Barin Cruz, L., Legoux, R. and Correa Dantas, D. (2013), "Microfinance in Latin America and the Caribbean: The influence of territory on female repayment performance in a polarized region", Management Decision, Vol. 51 No. 8, pp. 1596-1612. https://doi.org/10.1108/MD-05-2012-0382