The Microfinance Review

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Social and Financial Efficiencies of Microfinance Institutions


Affiliations
1 Student MBA (Banking and Financial Services), MIT World Peace University, Pune, India
     

   Subscribe/Renew Journal


Microfinance institutions (MFIs) have been developed as an alternative solution for alleviation of poverty. They are specialised financial institutions with both social as well as profit motives. This study analyses performance of Indian MFIs based on their financial and social efficiency using data development analysis method. The analysis reveals that for MFIs, the average social performance efficiency is 76.2% and financial performance efficiency is 73.2%. Moreover, it is observed that socially efficient MFIs are not efficient in lending larger loans and this affects their profitability

Keywords

Microfinance, Data Envelopment Analysis, Hypothesis Analysis
User
Subscription Login to verify subscription
Notifications
Font Size

  • Cooper, W W, L M Seiford and J Zhu (2004): “CCR Model and Production Correspondence”, Handbook on Data Envelopment Analysis, International Series in Operations Research and Management Science, pp.41-47, Springer, Boston, MA.

  • Haq, M, M Skully and S Pathan (2010): “Efficiency of Microfinance Institutions: A Data Envelopment Analysis”, Asia-Pacific Financial Markets, 17, pp.63-97.

  • Hermes, N and M Hudon (2018): “Determinants of the Performance of Microfinance Institutions: A Systematic Review”, Journal of Economic Surveys, Vol. 32, No. 5, pp.1483-1513.

  • Indra, W and E Ali (2015): “Social and Financial Efficiency of Islamic Microfinance Institutions: A Data Envelopment Analysis Application”, Socio-Economic Planning Sciences, Vol. 50, pp.1-17.

  • Kipesha, E F (2012): “Efficiency of Microfinance Institutions in East Africa: A Data Envelopment Analysis”, European Journal of Business and Management, Vol. 4, No. 17, pp.77-88.

  • MIX Market (2021): Data Catalog, The World Bank, Retrieved on April 30, 2021, from https://datacatalog.worldbank.org/dataset/mix-market Markus, P (2019): “Market for 33 Percent Interest Loans: Financial Inclusion and Microfinance in India”, India Review, Vol. 18, No. 1, pp.88-111.

  • Prathap, B N, K C Subrahmanya and B S Harisha (2018): Microfinance Delivery –Challenges and Remedies, International Journal of Management Studies, Vol. 5, No. 3(9), pp.138-144.

  • Yves, F and A Vassiliev (2007): “Efficiency in Microfinance Institutions: An Application of Data Envelopment Analysis to MFIs in Peru” in Microfinance and Public Policy, International Labour Organization (ILO) Century Series, Palgrave Macmillan, London, pp.89-110.


Abstract Views: 113

PDF Views: 0




  • Social and Financial Efficiencies of Microfinance Institutions

Abstract Views: 113  |  PDF Views: 0

Authors

Avani B. Pagar
Student MBA (Banking and Financial Services), MIT World Peace University, Pune, India

Abstract


Microfinance institutions (MFIs) have been developed as an alternative solution for alleviation of poverty. They are specialised financial institutions with both social as well as profit motives. This study analyses performance of Indian MFIs based on their financial and social efficiency using data development analysis method. The analysis reveals that for MFIs, the average social performance efficiency is 76.2% and financial performance efficiency is 73.2%. Moreover, it is observed that socially efficient MFIs are not efficient in lending larger loans and this affects their profitability

Keywords


Microfinance, Data Envelopment Analysis, Hypothesis Analysis

References