Article | Open Access | Published: 28 December 2019
Role of Managerial Competencies and Risk-Taking Behavior in Financial Service Outreach of Microfinance Banks in Pakistan
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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
Publisher:
ILMA UNIVERSITY
Published:
28 December 2019
Issue:
Issue 2 : Volume 15
E-ISSN:
2409-6520
P-ISSN:
2414-8393
This is an open access article distributed under the terms of the Creative Commons Attribution CC BY 4.0 license, which permits any use, distribution, and reproduction of the work without further permission provided the original author(s) and source are credited.