Commercialization and Mission Drift
Front-line loan officers of microfinance institutions are important in acquiring information on potential borrowers and selecting them in accordance with the microfinance institution's mission. This study uses a unique data set on loan officers and their loan portfolios from China's largest nongovernmental organization microfinance institution to test whether officers' personal characteristics affect the size and quality of their loans. The analysis uses a period in which the institution shifted from reliance on government donations and subsidies to commercial sources of funding. Imposing more commercial incentives on loan officers could affect how they balance potentially competing objectives to serve the poor and pursue profitability. The paper finds that loan officers who were formerly farmers or worked in local government were better able to maintain lending to poorer borrowers, without incurring substantially lower repayment rates on their loans. In short, it appears that the career backgrounds of loan officers did play a role in preventing mission drift.
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dig-okr-10986245192024-08-07T19:57:32Z Commercialization and Mission Drift Evidence from a Large Chinese Microfinance Institution Jia, Xiangping Cull, Robert Guo, Pei Ma, Tao CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES Front-line loan officers of microfinance institutions are important in acquiring information on potential borrowers and selecting them in accordance with the microfinance institution's mission. This study uses a unique data set on loan officers and their loan portfolios from China's largest nongovernmental organization microfinance institution to test whether officers' personal characteristics affect the size and quality of their loans. The analysis uses a period in which the institution shifted from reliance on government donations and subsidies to commercial sources of funding. Imposing more commercial incentives on loan officers could affect how they balance potentially competing objectives to serve the poor and pursue profitability. The paper finds that loan officers who were formerly farmers or worked in local government were better able to maintain lending to poorer borrowers, without incurring substantially lower repayment rates on their loans. In short, it appears that the career backgrounds of loan officers did play a role in preventing mission drift. 2016-06-13T22:17:49Z 2016-06-13T22:17:49Z 2016-05 Working Paper Document de travail Documento de trabajo http://documents.worldbank.org/curated/en/2016/05/26396730/commercialization-mission-drift-evidence-large-chinese-microfinance-institution https://hdl.handle.net/10986/24519 English en_US Policy Research Working Paper;No. 7680 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain World Bank, Washington, DC |
institution |
Banco Mundial |
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Estados Unidos |
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US |
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Bibliográfico |
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En linea |
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dig-okr |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
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English en_US |
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CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES |
spellingShingle |
CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES Jia, Xiangping Cull, Robert Guo, Pei Ma, Tao Commercialization and Mission Drift |
description |
Front-line loan officers of microfinance
institutions are important in acquiring information on
potential borrowers and selecting them in accordance with
the microfinance institution's mission. This study uses
a unique data set on loan officers and their loan portfolios
from China's largest nongovernmental organization
microfinance institution to test whether officers'
personal characteristics affect the size and quality of
their loans. The analysis uses a period in which the
institution shifted from reliance on government donations
and subsidies to commercial sources of funding. Imposing
more commercial incentives on loan officers could affect how
they balance potentially competing objectives to serve the
poor and pursue profitability. The paper finds that loan
officers who were formerly farmers or worked in local
government were better able to maintain lending to poorer
borrowers, without incurring substantially lower repayment
rates on their loans. In short, it appears that the career
backgrounds of loan officers did play a role in preventing
mission drift. |
format |
Working Paper |
topic_facet |
CREDIT PROGRAM BORROWER MICROLOAN LIABILITY PUBLIC SECTOR COMMERCIAL BANKS JOINT LIABILITY STOCK AMOUNT OF LOANS INTEREST DUMMY VARIABLES EXTERNAL FUNDING RURAL BANKING INTEREST RATE EXCHANGE FORMAL LOAN DEVELOPING COUNTRIES REPAYMENTS POLITICAL ECONOMY POSITIVE COEFFICIENT PORTFOLIO RURAL CREDIT CREDIT COOPERATIVES LOAN FINANCIAL STATEMENT CREDITWORTHINESS LOAN AMOUNT BORROWERS GOVERNMENT ASSETS ASSET MANAGEMENT LOAN DECISIONS DUMMY VARIABLE INFLATION INTERNATIONAL BANK STATE BANK DEVELOPING COUNTRY LENDER MICROFINANCE INSTITUTIONS CENTRAL BANK MATURITY SMALL BUSINESS OVERDUE LOANS FINANCIAL SUSTAINABILITY CREDIT COOPERATIVE GROUP LENDING LEGAL CONSTRAINTS REPAYMENT INCENTIVES FINANCIAL INSTITUTION COMMERCIAL BORROWING DISBURSEMENT COMMERCIAL BANK PORTFOLIOS CONTRACTS POOR BORROWERS INTEREST RATES LENDING DECISIONS FINANCIAL INSTITUTIONS LOCAL GOVERNMENT LOAN REPAYMENTS LOAN MATURITY LENDERS LOANS CREDIT PROGRAMS AGRICULTURAL BANK INVENTORY LOAN SIZES LEGAL FRAMEWORK FINANCE PORTFOLIO QUALITY LOAN TERMS SMALL LOANS INDIVIDUAL LOAN IPO TRANSACTION RURAL FINANCE LOAN REPAYMENT REPAYMENT HISTORIES GOOD REPAYMENT HISTORY CREDIT PROVIDERS REPAYMENT DIFFICULTIES FUTURE CREDIT ACCESS MICRO LOAN RETURNS REPAYMENT FINANCIAL PERFORMANCE REPAYMENT RATES DISBURSEMENTS CREDIT HISTORIES INFORMAL PROVIDERS LOAN PORTFOLIO SHARES FACE VALUE BALANCE SHEET TRANSACTION COSTS DEFAULT LOAN QUALITY MARKET COMMERCIAL BANK LOAN POSTAL SAVINGS LOAN OFFICER MICROCREDIT OVERHEAD COSTS MICROFINANCE BANK LOAN GOVERNMENT SUBSIDIES LOAN OFFICERS LOAN APPLICATIONS INVESTMENT COMMERCIAL BANKS SHARE CREDIT RATIONING LOAN PORTFOLIOS COLLATERAL POVERTY FINANCIAL RISKS GROUP GUARANTEE LOAN SIZE REVENUE PROFIT FINANCIAL SUPPORT RISK MANAGEMENT CONSUMER PRICE INDEX LENDING CHECK REPAYMENT PERFORMANCE RISK AVERSION PROFITS OUTSTANDING LOANS LIABILITIES DURABLES GUARANTEE SAVINGS BANK DEVELOPMENT BANK INCOME LEVEL MICROFINANCE INSTITUTION MICROENTERPRISES |
author |
Jia, Xiangping Cull, Robert Guo, Pei Ma, Tao |
author_facet |
Jia, Xiangping Cull, Robert Guo, Pei Ma, Tao |
author_sort |
Jia, Xiangping |
title |
Commercialization and Mission Drift |
title_short |
Commercialization and Mission Drift |
title_full |
Commercialization and Mission Drift |
title_fullStr |
Commercialization and Mission Drift |
title_full_unstemmed |
Commercialization and Mission Drift |
title_sort |
commercialization and mission drift |
publisher |
World Bank, Washington, DC |
publishDate |
2016-05 |
url |
http://documents.worldbank.org/curated/en/2016/05/26396730/commercialization-mission-drift-evidence-large-chinese-microfinance-institution https://hdl.handle.net/10986/24519 |
work_keys_str_mv |
AT jiaxiangping commercializationandmissiondrift AT cullrobert commercializationandmissiondrift AT guopei commercializationandmissiondrift AT matao commercializationandmissiondrift AT jiaxiangping evidencefromalargechinesemicrofinanceinstitution AT cullrobert evidencefromalargechinesemicrofinanceinstitution AT guopei evidencefromalargechinesemicrofinanceinstitution AT matao evidencefromalargechinesemicrofinanceinstitution |
_version_ |
1809105267260915712 |