Financing Structure and Performance: A Comparative Study of MFIs in Bosnia and Cambodia
Following the trend of commercialization, many microfinance institutions (MFIs) start to tap into commercial funding sources. As they transform into regulated institutions, MFIs move away from subsidized international donor funds towards private funding from commercial banks and social investors. The capital structure of MFIs is closer to typical traditional commercial financial institutions i.e. moving towards higher debt financing. As the financing options are expanding, it is necessary for MFIs to gain a better understanding of the impact of financing decisions on their performance. The research aims to make a scholarly contribution to the microfinance literature by analyzing whether funding sources and different combinations of funding sources have an impact on MFI performance. It is important to relate the MFI financial structure and performance to the country-specific context (e.g. legal, economic, financial market and political environment in which it operates). Therefore, several MFIs in Bosnia and Cambodia are selected as comparative case studies, particularly due to the similarities in the microfinance landscape in both countries.