Analysing the Financial Performance of Microfinance Mutual Funds

MicrofinanceMicrofinance institutions that were originally non-governmental organizations-managed institutions are turning into profit institutions that require external financial resources in addition to retained profits and deposit collection. Microfinance mutual fundsMicrofinance mutual funds could play an important role in funding microfinance institutionsMicrofinance institutions (Mfls) and microentrepreneurs, whether they can generate wealth for their investorsInvestors. Therefore, the objective of this study is threefold. First it analyses the financial performanceFinancial performance of microfinance mutual fundsMicrofinance mutual funds investing in global and global emerging geographical markets. Second, it examines the effect of the COVID-19 pandemicCovid-19 Pandemic crisis on fund financial performanceFinancial performance. Third, it studies the effect of ethicalEthical screening for managing microfinanceMicrofinance fund portfolios on their financial performanceFinancial performance. We have information on 98 microfinance mutual fundsMicrofinance mutual funds from March 2003 to December 2021. We adopt a multi-index modelMulti-Index Model for this sample. Our results indicate that some microfinance mutual funds can beat the market benchmark, achieving better financial performanceFinancial performance in non-crisis than in crisis periods. The adoption of ethicalEthical criteria in portfolio managementManagement reduces funds’ financial performanceFinancial performance. However, during the COVID-19 pandemicCovid-19 Pandemic, global ethicalEthical microfinance mutual fundsMicrofinance mutual funds perform better than their conventional counterparts and ethicalEthical microfinance mutual funds investing inGlobal emerging markets global emerging markets.