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The Effects of Religion on Development Efforts: Evidence from the Microfinance Industry and a Research Agenda

Author

Listed:
  • Mersland, Roy
  • D’Espallier, Bert
  • Supphellen, Magne
Abstract
This study responds to the need for more empirical knowledge pertaining to the effect of religion on development efforts. We use data from the microfinance industry to study performance differences between Christian and secular Microfinance Institutions (MFIs). We find that Christian MFIs have significantly lower funding costs and consistently underperform in terms of financial profit indicators. Contrary to our hypotheses Christian MFIs are as efficient in assuring loan repayment and their average loan sizes are on par with those of their secular peers.

Suggested Citation

  • Mersland, Roy & D’Espallier, Bert & Supphellen, Magne, 2013. "The Effects of Religion on Development Efforts: Evidence from the Microfinance Industry and a Research Agenda," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 41, pages 145-156.
    • Handle: RePEc:zbw:espost:323991
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    References listed on IDEAS

    as
    1. Mersland, Roy, 2009. "The Cost of Ownership in Microfinance Organizations," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 37(2), pages 469-478.
    2. Mersland, Roy & Strøm, R. Øystein, 2010. "Microfinance Mission Drift?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 38(1), pages 28-36.
    3. Mersland, Roy & Strøm, R. Øystein, 2010. "Microfinance Mission Drift?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 38(1), pages 28-36.
    4. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    5. Laurence R. Iannaccone, 1998. "Corrigenda [Introduction to the Economics of Religion]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
    6. Hermes, Niels & Lensink, Robert & Meesters, Aljar, 2011. "Outreach and Efficiency of Microfinance Institutions," World Development, Elsevier, vol. 39(6), pages 938-948, June.
    7. Xavier Reille & Jasmina Glisovic-Mezieres & Yannis Berthouzoz & Damian Milverton, 2009. "MIV Performance and Prospects : Highlights from the CGAP 2009 MIV Benchmark Survey," World Bank Publications - Reports 9490, The World Bank Group.
    8. D’Espallier, Bert & Guérin, Isabelle & Mersland, Roy, 2011. "Women and Repayment in Microfinance: A Global Analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 39(5), pages 758-772.
    9. Robert Cull & Asli Demirguç-Kunt & Jonathan Morduch, 2007. "Financial performance and outreach: a global analysis of leading microbanks," Economic Journal, Royal Economic Society, vol. 117(517), pages 107-133, February.
    10. Mersland, Roy, 2009. "The Cost of Ownership in Microfinance Organizations," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 37(2), pages 469-478.
    11. Koch, Dirk-Jan & Dreher, Axel & Nunnenkamp, Peter & Thiele, Rainer, 2009. "Keeping a Low Profile: What Determines the Allocation of Aid by Non-Governmental Organizations?," World Development, Elsevier, vol. 37(5), pages 902-918, May.
    12. Mersland, Roy & Strøm, Reidar Øystein, 2008. "Performance and trade‐offs in Microfinance Organisations—Does ownership matter?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 20(5), pages 598-612.
    13. Mersland, Roy & Randøy, Trond & Strøm, Reidar Øystein, 2011. "The impact of international influence on microbanks' performance: A global survey," International Business Review, Elsevier, vol. 20(2), pages 163-176, April.
    14. Katherine Marshall & Lucy Keough, 2004. "Mind, Heart and Soul in the Fight Against Poverty," World Bank Publications - Books, The World Bank Group, number 14927, April.
    15. Robert Emmons & Chi Cheung & Keivan Tehrani, 1998. "Assessing Spirituality Through Personal Goals: Implications for Research on Religion and Subjective Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 45(1), pages 391-422, November.
    16. Mersland, Roy & Randøy, Trond & Strøm, Reidar Øystein, 2011. "The impact of international influence on microbanks’ performance: A global survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 20(2), pages 163-176.
    17. Roy Mersland & Reidar Øystein Strøm, 2008. "Performance and trade-offs in Microfinance Organisations-does ownership matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(5), pages 598-612.
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