ARE FINANCIAL AND SOCIAL EFFICIENCY MUTUALLY EXCLUSIVE? A CASE STUDY OF VIETNAMESE MICROFINANCE INSTITUTIONS

Maxime Lebovics, Niels Hermes () and Marek Hudon

Annals of Public and Cooperative Economics, 2016, vol. 87, issue 1, 55-77

Abstract: A major debate in microfinance focuses on the existence of a trade-off between the financial sustainability of microfinance institutions (MFIs) and their outreach to poor clients. This paper adds to this debate by analyzing whether financial and social efficiency are mutually exclusive in a context of implicit subsidies by the state and international donors. We use data from a sample of 28 Vietnamese MFIs and apply Data Envelopment Analysis (DEA) to identify the existence of a trade-off. Our analysis shows that for Vietnamese MFIs financial and social efficiency are not related. We interpret this as evidence for the fact that there is no support to believe that there is such a trade-off. Subsidies, based on which most Vietnamese MFIs currently operate, helps them to show high financial efficiency, while at the same time being able to attain their social goals. Nevertheless, this model may not be sustainable in the long-term.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://onlinelibrary.wiley.com/doi/10.1111/apce.2016.87.issue-1/issuetoc (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Are Financial and Social Efficiency Mutually Exclusive? A Case Study of Vietnamese Microfinance Institutions (2016)
Working Paper: Are Financial and Social Efficiency Mutually Exclusive? A Case Study of Vietnamese Microfinance Institutions (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:annpce:v:87:y:2016:i:1:p:55-77

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1370-4788

Access Statistics for this article

Annals of Public and Cooperative Economics is currently edited by Marco Marini

More articles in Annals of Public and Cooperative Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().