From the top to the bottom: The global environment and microfinance institution (MFI) performance in the West African Economic and Monetary Union countries

Abstract This paper highlights the effects of macroeconomic and macroinstitutional environments on the performance of microfinance institutions (MFIs) in the West African Economic and Monetary Union (WAEMU) countries. The quality of this relationship can help MFIs to succeed, as well as adequate policies. This analysis is conducted using panel data spanning the period 2004–2014. We find that economic performance goes hand in hand with MFIs' sustainability in WAEMU countries. By contrast, improved macroinstitutional conditions result in a decrease in MFIs financial performance. Last but not least, MFIs reach out significantly more to the poorest when countries' institutions are improving.