Seminar series in social entrepreneurship – Summary (2); Anaïs PERILLEUX “Surplus Distribution in Microfinance: Differences Among Cooperative, Nonprofit, and Shareholder Forms of Ownership”

Seminar series in social entrepreneurship

In the context of the Inter‐University Attraction Pole (IAP) “If not for profit, for what? And how?” gathering four Belgian universities around social enterprise and social entrepreneurship (HEC-ULg, UCL, Solvay-ULB, VUB);

In the context of the Doctoral Seminar in Social Entrepreneurship (Prof. B. Huybrechts & S. Mertens) and in collaboration with the EMES network; a Seminar series in social entrepreneurship will be organized at HEC‐ULg from February to May 2014.

Download the program of the Seminar here



On Tuesday 25th March 2014, Dr. Anaïs Périlleux (Université Catholique de Louvain) was invited at the Doctoral Seminar in Social Entrepreneurship organized at HEC Management School, University of Liege. She delivered a presentation on “Economic analysis of different types of ownership” by presenting her article “Surplus Distribution in Microfinance: Differences Among Cooperative, Nonprofit, and Shareholder Forms of Ownership”, co-written with Marek Hudon and Eddy Bloy. This paper has been published in Nonprofit and Voluntary Sector Quarterly, and has been selected as being the best article published in this journal in 2013.

As elaborated by the Johns Hopkins Comparative Nonprofit Sector Project (Salamon & Anheier, 1997), nonprofit organizations (NPOs) fit the criteria of not-profit-distribution; this means that these organizations use surplus revenues to achieve their goals rather than distributing them as profit or dividends. Hence, a comparison between NPOs, cooperatives (COOPs) and shareholder forms (SHFs) was necessary to understand the differences between ownership forms and surplus distribution.

Anaïs Périlleux began her presentation by explaining two strong characteristics of her paper. First, that the microfinance industry is evolving: we assist in gradual institutional change in microfinance institutions (MFIs). Transformation of NGOs into shareholder capital companies is seen by many actors in the industry, such as donors, as being one of the best methods to expand the sector. Second, the “global productivity surplus” method, developed to evaluate the surplus distribution in public companies (Burlaud & Dahan, 1987), has never been used for analyzing the surplus distribution in MFIs. The data set is composed of 230 MFIs’ financial statements included in the reports of two leading microfinance rating agencies: Microfinanza and PlaNet Rating. The authors selected two years of financial statements for each institution rated between 2002 and 2007. Hence, the database is made up of 460 observations of 230 MFIs.

In MFIs, the surplus can be allocated in several ways. First, to borrowers through decreasing interest rates. Nevertheless, the results suggest that there is no significant difference in the distribution of the surplus to borrowers among COOPs, NPOs, and SHFs. Second, staff benefit from the surplus by an increase of their salaries. In this case, COOPs’ employees benefit greatly from the surplus distribution, as their surplus is significantly higher than the employees’ surplus in the two other types of MFIs. Third, providers can also benefit from surplus distribution through an increase of MFIs’ expenditures. Surpluses are positive for the three types of MFIs, with a higher proportion for COOPs than NPOs. Nevertheless, the increase can be due to price increase of the material acquisitions, or to the acquisition of higher quantities. Finally, the surpluses can support gross self-financing margin, when they are put in reserve for future investments, capital growth or remuneration to capital. Different from COOPs, NPOs and SHFs tend to give a much larger share of their surplus toward self-financing. Nevertheless, self-financing margins are used by NPOs to finance future investments and by SHFs to remunerate capital.

Then, Daniel Schleck presented the surplus account method developed by Burlaud and Dahan (1987) used in the article. Sybille Mertens asked to what extent this method and the comparison between NPOs, COOPs and SHFs, could be applied to other industries of the nonprofit sector, such as the elderly care. Nevertheless, as stressed by a participant, we need to be cautious in not reducing the action of NPOs to financial indicators. For doing so, it is important to have in mind the different non-market and non-monetary values of the NPO sector. The question of growth and sustainability of the industry is indeed an increasing concern from the actors themselves and the funders. But the stakeholders must take into account other indicators; otherwise risk of mission drift will rise.

Finally, we discussed the limits of the methodology in the article. We wondered what happens when the surplus is negative. In the article, there is no separation of the sample according to the variations of surpluses. Another limit is that we do not really know what is related to the internal organization or the environment. Indeed, there is no geographic separation of the sample. This could help to understand if, for example, an increase of salary is due either to the will of the MFI or either to the evolution of labor market.


Burlaud, A., & Dahan, L. (1987). Productivity Assessment in the Public Sector: Global Productivity Surplus Accounts. Financial Accountability & Management, 3(3‐4), 235-247.

Périlleux, A., Hudon, M., & Bloy, E. (2012). Surplus Distribution in Microfinance Differences Among Cooperative, Nonprofit, and Shareholder Forms of Ownership. Nonprofit and voluntary sector quarterly, 41(3), 386-404.

Salamon, L. M., & Anheier, H. K. (1997). Defining the Nonprofit Sector : a Cross-National Analysis. Manchester/New York : Manchester University Press.


C MeyerCamille Meyer is currently undertaking a Ph.D. in Management at the Centre for European Research in Microfinance (CERMi) of the Université libre de Bruxelles (ULB). He works on microfinance and common goods, particularly focusing on Brazilian community development banks. He obtained a FRESH fellowship from the Belgian National Fund for Scientific Research (FNRS).


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