In credit we trust: Building social capital by Grameen Bank in Bangladesh

Efficiency assessment of microfinance institutions: using DEA with weighted Russell directional distance model

Purpose

The study aims to focus on data envelopment analysis for assessing the microfinance institutions (MFIs) efficiency over the footings of its undesirable output, i.e. non-performing loans (NPLs). The attention is not only to evaluate the efficiency but also to identify the variable wise inefficiencies incorporating the quality of the portfolio.

Design/methodology/approach

The paper assessed MFI efficiency using three different methods of treatment of undesirable output to portray the significant difference. It also has used an advanced methodological model, i.e. weighted Russell directional distance model (WRDDM), under the non-radial assumption that allowed us to find the variable-wise inefficiency contribution. The study also investigated the efficiency differences concerning ownership, including all sizes of MFIs.

Findings

The study findings evidence the fall in efficiency score as NPL integrated, and it is found to be statistically significant. In the context of inefficiency assessment, among all input and output variables, total employees and operating expenses, portfolio quality inefficiencies are the leading causes of MFI inefficiencies. Undesirable output inefficiency accounts for almost one-third part of the total inefficiencies and remaining due to input inefficiencies. It is significant to draw attention that there is no improvement in undesirable output inefficiency. By contrast, input inefficiencies retained gains for two years and gradually showed a decreasing trend throughout 2015–2017.

Research limitations/implications

The authors have used balanced panel data of 72 Indian MFIs for five years' period from 2013–2017 whose complete data were available in the Microfinance Information Exchange.

Practical implications

The paper has focused on identifying the inefficiencies that are needed to be focused on to attain efficiency. It could provide vital information to the managers, policymakers in identifying the causes of inefficiencies, which is crucial to improve for long-term sustainability. It will be a roadmap for benchmarking, strategy building and policy-making processes.

Social implications

The findings of the study help in finding the benchmarking information for the inefficient decision-making units to identify the target units that need particular attention to focus. These practices could give a positive outcome, not only for institutions but also for the MFI clients.

Originality/value

The study provides an insight in to variable-wise inefficiency measurement using advanced model WRDDM in Indian context MFIs.

Applied Research in Low-Income Countries: Why and How?

Research and development (R&D) offer promising clues to address a wide range of socioeconomic problems through the development of new products and services or often by improving the existing ones. High-income countries (HICs) have realized the worth of R&D and invested tremendously in that sector; however, resource-poor low-income countries (LICs) are still far behind in realizing the potential benefit that R&D could offer for economic growth and national development. Even if some LICs have a positive outlook towards the R&D sector, the trend of emulating works from HICs to solve local or regional issues have most often yielded counterproductive results. LICs are suggested primarily to focus on applied research by incorporating their socioeconomic and cultural aspects to solve their everyday problems whose investigation is often ignored in research-intensive nations. Moreover, applied research in LICs offers the potential to provide low-cost and innovative solutions to local and regional problems with global implications.

Social capital drives SME growth: A study of family firms in Poland

Poland’s successful political, economic, and social transformation since the 1990s has seen the dynamic development of family enterprises. Most of them are in the small- and medium-sized enterprises sector and have become an important part of the Polish economy. What drives these family firms is not necessarily physical or even financial capital, but continuous human or social capital. We analyze how family businesses are based on the interdependence of family ownership and business with the social capital of the family. This article reflects on how the government, in encouraging small- and medium-sized enterprise development in an economy with traditionally low social capital, can benefit from the example of high social capital found in family firms. The article contains the interpretation of the results of research conducted in 2009–2010 and 2014–2016.

Assessing the Livelihood Vulnerability of Rural Indigenous Households to Climate Changes in Central Nepal, Himalaya

Climate change and related hazards affect the livelihoods of people and their vulnerability to shocks and stresses. Though research on the linkages between a changing climate and vulnerability has been increasing, only a few studies have examined the caste/ethnicity and gender dimensions of livelihood vulnerability. In this study, we attempt to explore how cultural and gender-related aspects influence livelihood vulnerability in indigenous farming mountain communities of the Nepal Himalaya in the context of climate change. We applied the Livelihood Vulnerability Index (LVI) to estimate household (social group and gender-based) vulnerability in farming communities in the Melamchi River Valley, Nepal. The results identified female-headed families, and those belonging to disadvantaged social groups as more vulnerable and in need of being preferentially targeted by policy measures. Higher exposure to climatic extremes and related hazards, dependency on natural resources, lack of financial assets, and weak social networking were identified as components that determine overall vulnerability. The study also visualizes complex adaptation pathways and analyzes the influence of gender and ethnicity on the capacities of households and communities to adapt to climate change.

The broken tables of stone: a decalogue approach to corporate compliance practice

Purpose

Corporate compliance practices are often “coercively” structured, coined by a legal discourse and derived from individualist normative concepts. Drawing on the “logic of the Decalogue”, the purpose of this paper is to design an “enabling” approach based on a covenantal logic present within the Decalogue.

Design/methodology/approach

The approach is interdisciplinary analysis summarizing exegetical, social science and business literature.

Findings

Within a covenantal and transcendental perspective, a morally literate community of employees, which have learned to reflect upon their responsibility, form the basis for compliance arrangements. They form a necessary complementary element of functional compliance systems.

Practical implications

The covenantal logic of the Decalogue can orientate the formulation of corporate compliance programs, which intend to follow an “enabling” approach. Normative claims should be rooted in an analysis of responsibilities towards relevant stakeholder groups. The potential of “spiritual capital” should be taken into consideration.

Originality/value

Reflecting one of the oldest ethical documents of human civilisation in the context of the contemporary management discussion on “coercive versus enabling control”, the orientating role of practical wisdom from the Jewish tradition becomes tangible.