Outreach and Efficiency of Microfinance Institutions

Niels Hermes (), Robert Lensink and Aljar Meesters

World Development, 2011, vol. 39, issue 6, 938-948

Abstract: Summary This paper uses stochastic frontier analysis to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). We find convincing evidence that outreach is negatively related to efficiency of MFIs. More specifically, we find that MFIs that have a lower average loan balance (a measure of the depth of outreach) are also less efficient. Moreover, we find evidence showing that MFIs that have more women borrowers as clients (again a measure of the depth of outreach) are less efficient. These results remain robustly significant after having added a number of control variables.

Keywords: microfinance; outreach; sustainability (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (232)

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Working Paper: Outreach and Efficiency of Microfinance Institutions (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:39:y:2011:i:6:p:938-948

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