Social capital boosts performance of European microfinance institutions, study finds.
This paper looks at what makes microfinance institutions in Europe successful. The researchers studied 302 of these institutions from 2008 to 2015 and found that having strong social connections helps them perform better. This means that when these institutions have good relationships with their clients and operate in societies with strong social ties, they are more likely to do well in terms of managing risk, financial performance, and efficiency. This information can be useful for setting up new microfinance institutions in European countries where they are not common yet.