Performance of microfinance institutions in achieving the poverty outreach and financial sustainability: When age and size matter?

Mahinda Wijesiri, Jacob Yaron and Michele Meoli

MPRA Paper from University Library of Munich, Germany

Abstract: Using a two-stage DEA bootstrapped metafrontier approach, we investigate the effects of age and size on efficiency estimates of microfinance institutions (MFIs). In the first-stage, we use a metafrontier model combining with DEA bootstrapped procedure to obtain statistically robust and comparable efficiencies. In the second-stage, we employ a bootstrapped truncated regression to account for the impact of exogenous factors on both dimensions of efficiency. Results highlight the importance of model specification for MFIs operating in different geographical regions. Moreover, we find that although older MFIs perform better than younger ones in terms of achieving financial results, they are relatively inefficient in achieving outreach objectives. We also document that MFI size matters: larger MFIs tend to have higher financial and outreach efficiency.

Keywords: Data envelopment analysis; Metafrontier; Bootstrap; Efficiency; Microfinance (search for similar items in EconPapers)
JEL-codes: C14 C15 C18 G2 G23 O16 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-eff and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/118851/1/MPRA_paper_69821.pdf revised version (application/pdf)

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