Roy Mersland

Roy Mersland
Universitetet i Agder | UIA · School of Business and Law

Professor

About

112
Publications
132,184
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Introduction
I am the director of CERSEM - one of Europe's leading research groups on social enterprises and microfinance. ------ https://cersem.uia.no/. ------ CERSEM is a team of around 20 researchers with strong emphasis on producing relevant research of high academic quality. We have wide access to microfinance data which we use to explore/develop theories relevant for wider academic/practitioner audiences, in particular those interested in the operation and performance of social enterprises like MFIs.
Additional affiliations
January 2012 - present
Universitetet i Agder
Position
  • Professor (Full)
August 2010 - present
Université Libre de Bruxelles
Position
  • Professor

Publications

Publications (112)
Article
In the microfinance industry an increasing number of providers are undergoing an institutional transformation from NGO to a shareholder-owned and typically regulated financial entity. Little is known about the extent to which this transformation affects the way microfinance institutions (MFIs) conduct their business. Our results obtained by applyin...
Article
Full-text available
This paper investigates the relations between female leadership, firm performance, and corporate governance in a global panel of 329 Microfinance Institutions (MFIs) in 73 countries covering the years 1998–2008. The microfinance industry is particularly suited for studying the impact of female leadership on governance and performance because of its...
Article
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We extend a recently developed generalized local polynomial estimator into a semiparametric smooth coefficient framework to estimate a generalized cost function. The advantage of the generalized local polynomial approach is that we can simultaneously choose the degree of polynomial for each continuous nonparametric regressor and the bandwidths via...
Article
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Microfinance is a global high-growth industry, in which entrepreneurship is prevalent and substantial. Based on the theoretical argument that microfinance entrepreneur-chief executive officers (CEOs) are “motivated agents” with a unique ability to hire and socialize mission-oriented staff, we hypothesize that these CEOs produce more sustainable mic...
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This article examines whether it pays to be green in the microfinance industry. Environmental issues are important for all businesses around the world, and thus many microfinance institutions (MFIs) started embracing them as an additional objective alongside their traditional social and financial objectives. This article is among the first to test...
Article
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Corporate governance remains fundamental to ensuring the social mission alongside the financial sustainability of microfinance institutions. One primary governance issue relates to the legal form used to perform microfinance activities. The sector deploys various forms including Banks, Non-Bank Financial Institutions, Cooperatives and NGOs, but eac...
Article
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Savings groups provide savings and loans to low-income individuals in rural and peri-urban areas. This study applies Bayesian data mining methods to a database of more than 200,000 savings groups with the aim of identifying which micro, meso, and macro factors are associated to profit generation in the groups. The results show that the facilitation...
Article
The literature on social enterprises has largely examined tradeoffs at the organizational level. In this study, we examine tradeoffs at the employee level. By analyzing the case of an Ecuadorian microfinance institution, we show that the tenure of social enterprise employees affects individual social and financial performance differently: the relat...
Article
This paper examines the effect of the gender combination of client-loan officer pairs on loan repayment in an Ecuadorian microfinance institution. We show that among the four possible client-loan officer gender pairs i.e. female client-female loan officer, female client-male loan officer, male client-male loan officer and male client-female loan of...
Article
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Social enterprises in the microfinance industry need to adhere to both financial and social demands. Critics argue that there is a mission drift away from the social mission, and this has motivated the introduction of social rating agencies to strengthen the business ethics of microfinance institutions (MFIs). Using a global dataset of 204 socially...
Article
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Purpose The purpose of this study is to determine whether there exists employee-client matching at the bottom of the pyramid (BOP) and the most favourable employee-client categorization in terms of employee productivity when serving the BOP market. This is important in a bid to determine how to effectively operate at the BOP given the market’s uniq...
Article
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Microfinance is a banking market in which operating costs are high while non-performing loans (NPLs) rates are low. While the existing literature tends to explain that the high operating costs arise from the provision of small loans, we argue that excessive efforts to control loan losses can also be a contributing factor. Therefore, this paper inve...
Technical Report
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Members’ Spotlight on Encouraging Effective and Inclusive Savings
Article
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Formal financial institutions inadequately distribute startup capital to business ventures of ethnic minorities, women, low-educated, and young people. Self-financing groups fill this gap because in these associations agents accumulate their savings into a fund that is later used to provide loans to the members. This study builds and simulates an a...
Article
Social enterprises (SEs) are hybrid organizations that simultaneously pursue financial and social goals, while addressing institutional voids. Despite the extensive cross-border activities of SEs, the state of research addressing such flows of funds, technology and personnel is undeveloped. In this introductory article, we discuss the unique aspect...
Article
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Good governance is crucial to achieving an organization's mission. Nevertheless, little is known about how the structure of governance is influenced by the nonprofit (NPO) or for‐profit ownership (FPO) structure of an organization, partly because they tend to be active in different sectors. In this paper we overcome this challenge by using data fro...
Article
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This paper examines the relation between geographic diversification and credit risk in microfinance. The empirical findings from the banking industry are mixed and inconclusive. This study extends the discussion into a new international setting: the global microfinance industry with lenders having both social and financial objectives. Using a large...
Article
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Social enterprises are hybrid organizations that concurrently pursue social and economic goals and hence are mid-way between conventional capitalistic firms and non-profit organizations. Many social enterprises are becoming international; delivering services across borders. With the objective of understanding the internationalization of these uncon...
Article
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Recent research suggests that many microfinance institutions increasingly focus on financial performance at the expense of the social component of their dual objectives. Existing studies typically assume that capital providers and managers mainly drive this so-called mission drift. In this study, we investigate whether ‘personal mission drift’ at t...
Article
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Prior studies of the diversi�cation-driven cost savings from the joint provision of credit and deposits in micro�nance usually ignore the multi-way heterogeneity across MFIs which vary substantially in size, business model, target clientele and operate in diverse environments. Using a quantile panel data model with correlated effects capable of acc...
Chapter
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Over the past four decades, microfinance has grown from small local initiatives into a global phenomenon practiced in many markets, mostly in low-income economies but also in well-developed markets like the US and the EU. Interestingly, microfinance institutions (MFIs), that is, providers of financial services to end customers, often have several c...
Research
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Do you know what savings groups are, how they are structured, how they perform and where they flourish? In fact, savings groups are one of the World’s largest banking systems. At the Center for Research on Social Enterprises and Microfinance (CERSEM) we find savings groups fascinating and have therefore initiated a large new project where we will r...
Article
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This study examines whether the agency cost component referred to as “residual loss” differs between nonprofit and shareholder-owned microfinance organizations and whether such costs are further influenced by CEO power. We use operating expenses, asset utilization, liquidity, and tangible asset intensity to proxy for residual loss. Using 374 microf...
Article
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We study mission drift in social enterprises by examining whether these organizations stick to the actual mission enshrined in their mission statements. We use data from microfinance organizations (MFOs), a homogeneous group of social enterprises which have been scrutinized—and sometimes criticized—for mission drift. We focus on three publicly reco...
Article
This multi-year study examines the relationship between financial performance and language use, observing 405 partnerships between microfinance banks and their international financial partners in 74 countries. Drawing on language research in international business, we find that microfinance banks based in English-speaking, French-speaking, and Span...
Article
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This study addresses the simultaneous and diverse effects of differences in informal and formal institutions on cross-border alliances' financial performance. We utilize data from 405 microfinance institutions (MFIs), based in 74 developing countries, that have alliances with partners from developed countries. We find that the impact of informal in...
Article
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There is a positive association between CEO tenure and the debt proportion of microfinance institutions. Microfinance institutions need improved access to debt capital to cover a huge and increasing world demand for microfinance services. More experienced CEOs may be more aligned with the microfinance institution's mission, and they may have a bett...
Article
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Purpose This study is motivated by recent research suggesting that the funding benefits of using Big Four auditors may not be as uniform as were previously assumed. The purpose of this paper is to analyze the relationship between use of Big Four auditors and access to debt capital by applying data from microfinance institutions (MFIs) in emerging c...
Article
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Purpose The purpose of this paper is to empirically relate subordinate board structures with improved financial and social performance in microfinance institutions (MFIs). Design/methodology/approach The research question is analyzed using a panel data from 23 MFIs in Ethiopia over a period of 2006-2011. Random effects panel data estimation is app...
Article
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This study examines the relationship between the origin of chief executive officers (CEOs) and performance in hybrid businesses using a sample of 353 microfinance institutions (MFIs) from 76 countries during 1996–2011. The statistical results suggest that MFIs whose CEOs have been recruited internally perform better compared to institutions with ex...
Article
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https://www.journals.elsevier.com/journal-of-world-business/call-for-papers/the-internationalization-of-social-enterprises
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Microfinance institutions (MFIs) are typical examples of hybrid organisations, meaning organisations pursuing both a financial and social logic. This study examines the question of whether financial and social performance improves when an MFI’s chief executive officer (CEO) has a business education. We apply the random effects instrumental variable...
Article
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Christian affiliation has a minimal impact on the design of corporate governance in microfinance organizations. In comparison to secular microfinance institutions (MFIs), Christian MFIs do not have a slacker governance design. Christian MFIs have a higher audit quality and a significantly higher number of board meetings. Christian MFIs are relative...
Article
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This article examines the impact of microfinance ‘plus’ (i.e. coordinated combination of financial and nonfinancial services) on the performance of microfinance institutions (MFIs). Using a global data set of MFIs in 77 countries, we find that the provision of nonfinancial services does not harm nor improve MFIs’ financial sustainability and effici...
Article
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Using a unique sample from an Ecuadorian microfinance institution that has focused on increasing its outreach to disabled clients, we present a comparative analysis of the characteristics of disabled versus non-disabled clients. The study shows that disabled clients are more often male, are less likely to be living with a partner, have fewer childr...
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In countries with weak institutions, board governance becomes more important. This study uses a unique dataset from listed sub-Saharan African companies to examine the relationship between ownership composition and board compensation. It further analyses the association between board compensation and company performance. The findings indicate that...
Article
This research advances the hypothesis that female leaders – chief executive officers (CEOs), chairs, and directors – of a microfinance institution (MFI) give more priority to the poorest families in loan provision than male leaders do. We differentiate between a depth and a width dimension of financial inclusion. The data set is a unique global pan...
Article
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We use an Ecuadorian sample to investigate if there are differences in motivations for business start-up between persons with and without disabilities. Generally, we do not document significant differences. The reason might be that we use a sample selected among customers of the microfinance bank Banco D-MIRO. Without targeted incentives, disabled...
Article
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The global microfinance industry has experienced high growth rates over the past decades, and the World Bank foresees a future market with billions of customers. However, the industry's continued growth is contingent on its ability to create a governance structure that supports microfinance institutions' long-term performance. Because microfinance...
Article
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Microfinance Institutions (MFIs) provide financial services to the poor and in many ways resemble both banks and non-profit organizations. Many MFIs target women because more women than men are poor, especially in rural areas. Studies show that women manage money differently from men and have different leadership styles. Thus, in credit unions and...
Article
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This study uses survey data from the microfinance industry in Uganda to investigate whether there are differences among industry staff members in beliefs and views regarding persons with disabilities. For several of the questions, various staff sub-groups respond significantly differently. A recurring result is that staff members who have a relativ...
Article
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The purpose of this empirical research from Uganda is to provide initial insight into the ‘black box’ of understanding the economic behaviour of persons with disabilities and about their use of microfinance services. First, we analyse the income levels of persons with disabilities in relation to their sources of income. Second, we study the income...
Chapter
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Banking regulations have been subject to extensive research and debate for decades. In the aftermath of the 2008 global financial crisis, the focus on banking regulations and corporate governance has been particularly intense (e.g., Claessens and Yurtoglu, 2013). Simultaneously, within the global microfinance industry, there has been relatively les...
Chapter
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Until a few years ago, most microfinance research was published in development journals and often focused on whether access to finance is beneficial for economically poor entrepreneurs and families (Mersland, 2009a). Over the last few years the scope of microfinance research has broadened. In particular, the ‘business’ of microfinance has become an...
Chapter
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Controversies have been a hallmark of microfinance in the years following the initial euphoria due to the awarding of the 2006 Nobel Peace Prize to Grameen Bank and Mohammad Yunus. MFIs have been accused of making people credit-dependent. How, though, do we measure their success or lack of it? This paper aims to discuss various ways of measuring MF...
Article
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Taking a business scholar's standpoint I assess the future of the microfinance industry. The basic question I try to answer is why the microfinance market continues to grow while public support for the industry is shrinking. I identify six underlying forces - demographic transition, reduced poverty, urbanization, economic growth, technological inno...
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The result of current aid policies is that only a small percentage of foreign aid reaches the poorest of the poor in the least developed countries. Current trends of urbanisation and self-reliance place elderly people in an increasingly difficult situation. This paper aims to stimulate debate by introducing an alternative mechanism for foreign aid....
Article
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This study uses data from the microfinance industry to analyze differences in earnings quality between for-profit and nonprofit organizations. The two sets of organizations differ with respect to both governance mechanisms and managerial incentives, and little research has been conducted to investigate how such differences affect the quality of fin...
Article
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We provide empirical evidence on focusing on women in microfinance and its consequences for microfinance institutions (MFIs). Based on a global dataset, the results indicate that a focus on women is associated with group-lending methods, international orientation, smaller loans, and non-commercial legal status. We find that a focus on women signifi...
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Commercial funding to microfinance institutions (MFIs) seems to follow the negative screening approach, being driven mainly by financial performance and professionalization of the MFIs while subsidized funding seems to follow a positive approach, being driven mainly by targeting poverty alleviation and social inclusion.
Article
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This study responds to the need for more empirical knowledge pertaining to the effect of religion on development efforts. We use data from the microfinance industry to study performance differences between Christian and secular Microfinance Institutions (MFIs). We find that Christian MFIs have significantly lower funding costs and consistently unde...
Article
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We evaluate the efficiency of microfinance institutions (MFIs) using a structural approach which also captures these institutions’ outreach and sustainability objectives. We estimate economies of scale and input price elasticities for lending-only and deposit-mobilizing MFIs using a large sample of high-quality panel data. The results confirm conje...
Article
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This paper studies the relation between board size and composition and cost savings (scope economies) from combining savings mobilisation and lending by microfinance institutions (MFIs). The findings support the hypothesis that employee representation on the board is associated with positive scope economies, possibly due to internal knowledge. Howe...
Chapter
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Microfinance institutions (MFIs) supply financial services to micro-enterprises and low-income families. MFIs pursue the double bottom lines of social development and financial returns, and their funding is supplied by a range of sources from donations to commercial investments. Microfinance is thus an arena in which donors meet professional invest...
Article
Full-text available
This paper studies the relation between board size and composition and cost savings (scope economies) from combining savings mobilization and lending by Microfinance Institutions. The findings support the hypothesis that employee representation on the board is associated with positive scope economies, possibly due to internal knowledge. However,...
Article
Full-text available
This study uses a unique, hand-collected sample of microfinance institutions from 73 countries that typically are not investigated in accounting research to analyze the relationships between audit quality and governance mechanisms. We examine two measures of audit quality, namely, the use of Big Four auditors and the presence of internal auditors w...
Article
Is the microfinance institution (MFI) able to charge unduly high lending rates and obtain a profitability incompatible with perfect competition? We use a global panel data set of MFIs. The Panzar and Rosse revenue test in static and dynamic versions is employed, together with analyses of price (the lending rate) and return on assets. We control for...
Chapter
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Er kristne organisasjoner gode forvaltere? Er de annerledes enn sekulære organisasjoner? Dette er spørsmål jeg har vært opptatt av i mange år. Grunnen til at jeg personlig har vært opptatt av dette er nok at jeg er utdannet økonom og samtidig har mange års arbeidserfaring fra avisen Vårt Land og fra Misjonsalliansen. Begge disser virksomhetene defi...
Article
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Rating assessments of microfinance institutions (MFIs) are claimed to measure a combination of creditworthiness, trustworthiness, and excellence in microfinance. Using a global data set covering reports from 304 microfinance institutions, this study suggests that these ratings are mainly driven by size, profitability, and risk. The overall results...