Abstract:
This study argues that patterns, trends and drivers of the efficiency of microfinance
institutions (MFIs) depend on the scope of financial sustainability measures and on MFIs’
inclination to either of the dual objectives of financial systems and outreach. A balanced
panel data of 164 MFIs for the period 2004-08 is extracted from the MIX website for the
study’s use. Both parametric and non-parametric efficiency estimation techniques are
used. Contrary to a trade-off between financial efficiency and outreach, the latter tends
to have a positive link with social efficiency. Negative effects of bureaucracies in property
registration and lack of credit information on social efficiency are also observed.
