Microfinance Institutions Fostering Sustainable Development by Region

Round 1

Reviewer 1 Report

Microfinance Institutions fostering Sustainable Development by region.

Summary:

The main objective of paper is to explore the extent to which Microfinance Institutions (MFIs) are fostering Sustainable Development (SD) by regions across the world. This paper is interesting because it includes special dimensions into the microfinance analysis. The effect of Microfinance on sustainable development depends on their geographic area’s contexts, the social aspect, the environment dimension and the governance feature. The research is based on data collection from two sources: academic literature on microfinance and the MIX Market database. The paper shows that significant differences exist depending on the region and confirm that operationalization should be adjusted at the regional context.

Major Comments:

1. The paper is interesting. The main theme of the paper rests on three ideas: “Sustainable Development”, “Microfinance Institutions”, and “Regional Differences”. These ideas are scattered all over the paper. The paper needs to be more streamlined.
   1. The introductory sentence of the paper begins with the idea of financial services for those who would be at the risk of financial exclusion. Who are those people? How do they access them? Why do they use them? How do MFIs serve these people? A clear motivation for is needed for the analysis presented in the paper.
   2. Sustainable development is a key idea in the paper. I would have preferred some explanation of that concept in the introductory literature. That would be helpful for readers who are less familiar with these concepts. What is sustainable development, really?
   3. The paper focuses on regional differences from the beginning. However, it does not provide necessary information on the regional differences in the introduction section.
      1. What is the basis of analysis for regional difference? This section should highlight the relationship between microfinance and sustainable development, and how they differ across regions.
   4. The paper does not define the main concepts until the literature review section. This needs to come in the paper much earlier, in the introduction section. The literature review really begins starting at line 97.
2. Research Design:
   1. The paper indicates the selection of keywords since the beginning but I was eager to know these keywords. I could not find them until the findings section.
   2. What is MIX Market data? Please provide a background. References 27, 61, 62 do not provide any information on what the MIX market data is. Again, SI is not defined earlier.
3. Findings:
   1. The findings are compelling. Please discuss the application of Kruskal-Wallis test in this section as well.
4. The paper can be strengthened by highlighting the FESG dimensions much earlier.
5. In the governance dimension, it would be interesting to go through the aspects of corruption and consumer protection. Likewise, some more explanation for green microfinance (definition might be a good idea). What is exactly the green microfinance? (line 333). Some explanation would help readers to deepen their understanding.
6. The authors talk about the Islamic dimension in Asia. Since there are many Muslims in Africa, it would be interesting to see a discussion of the religion’s impact there as well. That would help to see the difference in the religious point of view from both areas.

Minor Comments:

1. Please double check the Title case.
2. See the last paragraph in the introduction section. Should the next section be 1 or 2?
3. Abbreviations should be defined when they are used for the first time in the paper.
4. Minor errors and inconsistencies appear throughout the paper. Here are some examples. Again, the paper needs a thorough review for punctuation and sentence structures:

Line 16 …A holistic approach is, not it is;

Line 20 …for the analysis…studied: (: not ; );

Line 65…..the question mark (? Instead of .). Same for line 67;

Line 115 ….have considered (add ed);

Line 147 add s to accept (accepts);

Line 148 … determine (without s at the end);

5. Line 131 … incentives ….spouse seems to me a little confusing with the aspect of masculitnity-feminity dimension. It would be good to add some more explanation to clear the difference between them.
6. Line 222 …..SIs (SIs should be defined before). I did not see its definition.
7. Line 246 It is necessary to …
8. Line 283 …..3% of words in any in any (in any is repeated).
9. Line 345 …..1,124 MFIs form (from I think).
10. Line 377 The mean/main? instead of the means (see indicates).
11. Line 431 ….. the rest (I think it should be the best).
12. Line 630 …. Low, (? %), is the proportion is unknown?
13. Results section in Figure 3 is not really readable in the printed form.
14. Figure 1 presents EGS principles. But they are not discussed later in the paper.
15. Table 2: ESG dimension?

In sum:

The paper has interesting ideas. The findings are compelling. However, it needs some work for one to follow in its entirety in the current form. It needs a thorough clean up and the content needs to be organized better. Here is how I felt reading the paper: the paper says what it would do, what it did, or what it will do, but it does not present exactly what/how it did right away. Such information does not appear until much later in the paper. Please provide examples right when necessary for someone who may not be familiar with the topic. This is especially important for an interdisciplinary journal like Sustainability. Again, it has enough content. It just needs some polishing. I would be happy to read a revised version of the paper.

Author Response

REVIEWER #1

Thank you for your comments. They have helped us to significantly improve the paper. We have addressed each comment in particular, trying to shed light and elaborate points that needed to be uphold and expanded as per your suggestions. For the sake of a better exposition, after having carefully followed your review, we have answered each of your suggestions separately.

Summary:

The main objective of paper is to explore the extent to which Microfinance Institutions (MFIs) are fostering Sustainable Development (SD) by regions across the world. This paper is interesting because it includes special dimensions into the microfinance analysis. The effect of Microfinance on sustainable development depends on their geographic area’s contexts, the social aspect, the environment dimension and the governance feature. The research is based on data collection from two sources: academic literature on microfinance and the MIX Market database. The paper shows that significant differences exist depending on the region and confirm that operationalization should be adjusted at the regional context.

Major Comments:

1. The paper is interesting. The main theme of the paper rests on three ideas: “Sustainable Development”, “Microfinance Institutions”, and “Regional Differences”. These ideas are scattered all over the paper. The paper needs to be more streamlined.

1. The introductory sentence of the paper begins with the idea of financial services for those who would be at the risk of financial exclusion. Who are those people? How do they access them? Why do they use them? How do MFIs serve these people? A clear motivation for is needed for the analysis presented in the paper.

Answer: the whole Introduction section has been rewritten with more information about microfinance (lines: 29-69)

1. Sustainable development is a key idea in the paper. I would have preferred some explanation of that concept in the introductory literature. That would be helpful for readers who are less familiar with these concepts. What is sustainable development, really?

Answer: a better explanation and SD definition has been included (lines: 47-57)

1. The paper focuses on regional differences from the beginning. However, it does not provide necessary information on the regional differences in the introduction section.

1. What is the basis of analysis for regional difference? This section should highlight the relationship between microfinance and sustainable development, and how they differ across regions.

Answer: a new paragraph connecting these concepts has been added (lines: 58-69)

The paper does not define the main concepts until the literature review section. This needs to come in the paper much earlier, in the introduction section. The literature review really begins starting at line 97.

Answer: the introduction has been rewritten in order to attend this suggestion. Now the concepts are presented is a clearer manner. Thank you for all these comments.

1. Research Design:
1. The paper indicates the selection of keywords since the beginning but I was eager to know these keywords. I could not find them until the findings section.
2. What is MIX Market data? Please provide a background. References 27, 61, 62 do not provide any information on what the MIX market data is. Again, SI is not defined earlier.

Answer: with the aim of clarifying all the research process, this section has been reorganised. Data collection and analysis has been explained together for each one of the resource. Also the selection of keywords has been explained in more detail (lines: 232-276), Mix Market background has been provided (lines: 278-283) and a more extensive definition of Sustainable Indicators (lines: 284-293). Thank you again for your comments, now these sections is more clear and structured.

1. Findings:
1. The findings are compelling. Please discuss the application of Kruskal-Wallis test in this section as well.
2.  

Answer: now line 446 present the results of the application of Kruskal-Wallis test.

1. The paper can be strengthened by highlighting the FESG dimensions much earlier.

Answer: the definition of FESG dimensions has been rewritten and extended in the introduction section.

1. In the governance dimension, it would be interesting to go through the aspects of corruption and consumer protection. Likewise, some more explanation for green microfinance (definition might be a good idea). What is exactly the green microfinance? (line 333). Some explanation would help readers to deepen their understanding.

Answer: thank you for these comments. Lines 405-409 delve into corruption and consume protection concepts. Also in line 397 a definition of green microfinance is included.

1. The authors talk about the Islamic dimension in Asia. Since there are many Muslims in Africa, it would be interesting to see a discussion of the religion’s impact there as well. That would help to see the difference in the religious point of view from both areas.

Answer: Thanks for this suggestion. We agree with you that this could be really interesting research area, although the quality of African data and lack of research on this issue make us to be cautious about conclusions on this geographical area.

Until now microfinance research on Islamic banking has been focused on Asia region, and although MENA has very high Muslim percentage of total population (91.2%) the presence of microfinance in this region is very low (1%). We agree this issue needs further research and this very interesting suggestion has been included in the conclusions section (line: 709).

Minor Comments:

1. Please double check the Title case. Done.
2. See the last paragraph in the introduction section. Should the next section be 1 or 2? Done.
3. Abbreviations should be defined when they are used for the first time in the paper. Checked and corrected.
4. Minor errors and inconsistencies appear throughout the paper. Here are some examples. Again, the paper needs a thorough review for punctuation and sentence structures:

Line 16 …A holistic approach is, not it is; Corrected.

Line 20 …for the analysis…studied: (: not ; ); Corrected.

Line 65…..the question mark (? Instead of .). Same for line 67; Done.

Line 115 ….have considered (add ed); Corrected.

Line 147 add s to accept (accepts); Corrected.

Line 148 … determine (without s at the end); Corrected.

1. Line 131 … incentives ….spouse seems to me a little confusing with the aspect of masculitnity-feminity dimension. It would be good to add some more explanation to clear the difference between them.

Answer: the term might be confusing. It has been changed. Line: 165.

1. Line 222 …..SIs (SIs should be defined before). I did not see its definition. Corrected and explained (line: 284)

1. Line 246 It is necessary to …Corrected

1. Line 283 …..3% of words in any in any (in any is repeated). Deleted.

1. Line 345 …..1,124 MFIs form (from I think). Corrected.

1. Line 377 The mean/main? instead of the means (see indicates).

This connects with the comment 3. Findings. This results is related to the Kruskal-Wallis mean H test. Has been modified in the manuscript. Line: 446

1. Line 431 ….. the rest (I think it should be the best). The sentence has been rewritten.

1. Line 630 …. Low, (? %), is the proportion is unknown? This was a mistake. The percentage has been included.

1. Results section in Figure 3 is not really readable in the printed form. This figure has been eliminated.

1. Figure 1 presents EGS principles. But they are not discussed later in the paper. This figure has been eliminated (but it also should be FESG principles).

1. Table 2: ESG dimension? It has been correct. FESG dimension.

In sum:

The paper has interesting ideas. The findings are compelling. However, it needs some work for one to follow in its entirety in the current form. It needs a thorough clean up and the content needs to be organized better. Here is how I felt reading the paper: the paper says what it would do, what it did, or what it will do, but it does not present exactly what/how it did right away. Such information does not appear until much later in the paper. Please provide examples right when necessary for someone who may not be familiar with the topic. This is especially important for an interdisciplinary journal like Sustainability. Again, it has enough content. It just needs some polishing. I would be happy to read a revised version of the paper.

Thank you, again, for your comments. We hope that the revised manuscript has improved enough to address your concerns.

Author Response File: Author Response.pdf

Reviewer 2 Report

This paper requires major revision. Overall the research subject is interesting, but the presentation of the results should be more formal and less business oriented. Schemes presented in fig.1-fig.3 present rather obvious steps and can be omitted without . Authors should work more to present their methodology and findings in a more precise way or eg. how does their methodology differ from others.

It is for me unclear whether indices are constructed with enough scientific merit eg. whether authors construct own sentiment indices based on text mining or whether these are standard indices from the database they used.

Author Response

REVIEWER #2

Thank you for your comments. They have helped us to significantly improve the paper. We have addressed each comment in particular, trying to shed light and elaborate points that needed to be uphold and expanded as per your suggestions. For the sake of a better exposition, after having carefully followed your review, we have answered each of your suggestions separately.

Comments and Suggestions for Authors

This paper requires major revision. Overall the research subject is interesting, but the presentation of the results should be more formal and less business oriented.

In the new version of the paper we have tried to give it a more science based structure.

Schemes presented in fig.1-fig.3 present rather obvious steps and can be omitted.

Figures 1 to 3 have been eliminated. Also Figure 5 has been eliminated as it is was a graphic description of the findings.

Authors should work more to present their methodology and findings in a more precise way or eg. how does their methodology differ from others.

Methodology section has been rewritten. Data collection and analysis has been better describe in order to be more precise and show how robust it is. (lines: 218-321)

It is for me unclear whether indices are constructed with enough scientific merit eg. whether authors construct own sentiment indices based on text mining or whether these are standard indices from the database they used.

Thank you for this suggestion. We agree with you that it was unclear the way the indexes were constructed. The section has been totally rewritten in order to fulfil your suggestion. Lines: 232-276.

Thank you, again, for your comments. We hope that the revised manuscript has improved enough to address your concerns.

Author Response File: Author Response.pdf

Reviewer 3 Report

The research carried out by the authors has the following fundamental gaps:

     The theoretical framework on which the research is based is not related to the established objectives and the methodology used.
     The methodology used lacks scientific rigor.

Author Response

REVIEWER #3

The research carried out by the authors has the following fundamental gaps:

     The theoretical framework on which the research is based is not related to the established objectives and the methodology used.

     The methodology used lacks scientific rigor.

Thank you very much for your revision. Following the suggestions made by three referees of this paper we have improve it given it a clearer motivation, clarifying all the research process, and improving how the results are presented. Methodology section has been totally rewritten and better explained in order to justify its robustness.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Thank you for addressing the previous concerns. The paper looks much better. As previously stated, the paper is interesting and has enough content. The presentation and organization are much improved now. There are a few typos, punctuation issues, and some redundancies that need to be corrected.  

Author Response

Thank you very much for your answer.

The whole text has been reviewed to correct typos, punctuation issues, and redundancies.

Again, we want to thank you for all your suggestions because they have helped us to improve the paper.

Kind regards,

Reviewer 2 Report

After improvements the paper is better to read. Still there are doubts regarding appropriateness  and reliability of the methods and materials used in the study.

Author Response

Thank you, again, for your comments. Regarding the concerns about the methods, in the content analysis section the reliability of the model has been explained in more detail (lines: 268-283). We hope that the revised manuscript has improved enough to address your concerns.