This study investigates the influence of client protection principles (CPPs) in lending practice on the economic and social performance of Microfinance Institutions (MFIs). The demand for ethical and fair treatment of microfinance borrowers has increased in recent years after several incidences of exploiting clients in different parts of the world. In response to this call, many MFIs adopted CPPs in lending operations to borrowers. However, there is a debate about whether adopting CPPs enhances the economic and social performance of MFIs. We empirically test this using a unique panel dataset of 1015 MFIs (5650 MFI-year observations) operating in 93 countries from 2007 to 2018. We find a positive impact of client protection on social performance in the short- and long-run. The impact of client protection on financial performance is negative in the short run, but the effect diminishes in the long run. Our documented findings are robust across a battery of robustness tests and account for endogeneity using propensity score matching, two-stage least squares estimation, and a two-step system generalized method of moments. Detailed analyses show that not all the client protection principles have a significant impact on MFI performance. Additional analyses show that the influence of CPPs on social performance is more pronounced in larger than smaller MFIs. Also, adopting CPPs increases the clients' access to savings and the MFIs’ access to subsidized funds.

中文翻译：

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客户保护原则对小额信贷机构的经济和社会绩效重要吗？


本研究调查了贷款实践中的客户保护原则 （CPP） 对小额信贷机构 （MFI） 经济和社会绩效的影响。近年来，在世界不同地区发生了几起剥削客户的事件后，对小额信贷借款人道德和公平待遇的需求有所增加。为了响应这一呼吁，许多小额信贷机构在向借款人的贷款业务中采用了 CPP。然而，关于采用 CPP 是否能提高 MFI 的经济和社会绩效存在争议。我们使用 2007 年至 2018 年在 93 个国家/地区运营的 1015 个 MFI（5650 个 MFI 年观察）的独特面板数据集对此进行了实证测试。我们发现，客户保护对社会绩效的短期和长期都有积极影响。客户保护对财务业绩的影响在短期内是负面的，但从长期来看，这种影响会减弱。我们记录的发现在一系列稳健性测试中是稳健的，并使用倾向得分匹配、两阶段最小二乘估计和两步系统广义矩法来解释内生性。详细分析表明，并非所有客户端保护原则都会对 MFI 性能产生重大影响。其他分析表明，CPP 对社会绩效的影响在大型小额信贷机构中比在小型小额信贷机构中更为明显。此外，采用 CPP 增加了客户获得储蓄的机会，以及小额信贷机构获得补贴资金的机会。