ROLE OF MANAGERIAL COMPETENCIES AND RISK-TAKING BEHAVIOR IN FINANCIAL SERVICE OUTREACH OF MICROFINANCE BANKS IN PAKISTAN

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Volume 15 Issue 2 2019

Author(s):

Fozia Taj
COMSATS University, Abbottabad Campus
taj_fozia@yahoo.com

Kashif Rashid
COMSATS University, Abbottabad Campus
mkrashid@cuiatd.edu.pk

Yasir Bin Tariq
COMSATS University, Abbottabad Campus
yasirbintariq@gmail.com

Abstract This study aims to investigate the relationship between the managerial risk-taking, managerial competencies and financial service outreach of microfinance banks in Pakistan. Primary data was collected from 36 branches of microfinance banks (MFBs) in nine cities. The unit of investigation is the branch manager and senior credit officer of each MFB branch. Descriptive statistics, correlation and regression, are used for data analysis. This study found a positive relationship between financial service outreach of MFBs and managerial competencies; financial service outreach also has a positive relationship with the risk-taking behavior of managers. There is a positive relationship between risk-taking behavior and financial service outreach of banks. The risk-taking behavior partially mediates the relationship between the managerial competencies and financial service outreach. The magnitude of the relationship between managerial competencies and outreach is significant, and its magnitude reduces when there is the mediation of managerial risk-taking behavior between them. Thus, managerial competencies, along with risk-taking behavior are the keys drivers of financial service outreach of MFBs. This study informs MFB’s top management and policymakers that competencies of managers and their calculated risk-taking propensities determined outreach performance of the MFBs.
Keywords Micro-finance, managerial competencies, financial service outreach,Risk-taking behavior, mediating effect, Pakistan
Year 2019
Volume 15
Issue 2
Type Research paper, manuscript, article
Recognized by Higher Education Commission of Pakistan, HEC
Category "Y"
Journal Name IBT Journal of Business Studies
Publisher Name ILMA University
Jel Classification -
DOI https://doi.org/10.46745/ilma.ibtjbs.2019.152.03
ISSN no (E, Electronic) 2409-6520
ISSN no (P, Print) 2415-8393
Country Pakistan
City Karachi
Institution Type University
Journal Type Open Access
Manuscript Processing Blind Peer Reviewed
Format PDF
Paper Link http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/15.2/3.pdf