Green Microfinance in Europe
This paper analyzes the environmental performance of 58 European MFIs and provides empirical evidence about the drivers of environmental responsibility and practices. It also compares the environmental performance of traditional MFIs operating in Europe or America with other MFIs operating in developing countries. Results from the study suggest that the size of an MFI, investor concern for environmental performance, and donor interest are closely related to an institution’s environmental performance. The paper finds that providing loans larger than microcredit is linked to better environmental performance and it suggests that the additional revenues generated from these loans could help strengthen environmental performance. Moreover, no evidence is found to suggest that profit status of an institution has an impact on its environmental performance. The following hypotheses are tested in the paper:
- Size of the MFI is positively related to its environmental performance;
- Non-profit variable is positively related to environmental performance;
- Complementary offer of non-microfinance loans is positively related to environmental performance;
- Donors’ interest in environmental performance is positively related to an MFIs’ environmental performance;
- Investors’ interest in environmental performance is positively related to MFIs’ environmental performance.
