Title

Competition Between Microfinance NGOs: Evidence from Kiva

Document Type

Article

Publication Date

3-2012

Publication Title

World Development

Department

International Political Economy

Abstract

This paper investigates empirically the effect of competition between microfinance NGOs seeking subsidized capital from individual social investors. Although NGO behavior in competitive environments is often subject to controversy, there is little formal empirical evidence to illustrate theoretical findings and inform policy. Using data from Kiva, an online peer-to-peer (P2P) microfinance platform, we find that competition has a sizable negative impact on projects’ funding speed and that the effect is stronger between close substitutes. This is important because competition for subsidized capital implies organizational pressures similar to those faced when NGOs compete for donations.

Volume

40

Issue

3

pp.

643-655

ISSN

0305-750X