Drivers of performance of the microfinance institutions in selected South Asian countries

Chandralekha Ghosh and Ankana Das

International Journal of Economics and Accounting, 2020, vol. 9, issue 2, 155-179

Abstract: Microfinance institutions (MFIs) have been successfully operating for poverty alleviation and have played significant role in providing financial inclusion. This paper mainly tries to find out the performance drivers of the MFIs by using the data on 91 MFIs in seven selected Asian countries (Afghanistan, Pakistan, India, Bangladesh, Vietnam, Thailand, Indonesia) over the period 2004–2013 which have different backgrounds of evolution of MFIs. After panel data analysis it is found that MFI specific variables like real yield on gross loan portfolio is positively influencing return on assets (ROA), operational self-sufficiency (OSS) and percent of female borrower but cost per borrower is negatively influencing all the dependent variables. Regulatory quality of the country has positive influence on ROA and profit at margin of the MFIs. Domestic credit and growth of gross domestic product (GDP) per capita have positive impact on percent of women borrower, the representative of the social variable. This paper is important to the investors of MFI institutions, policy makers and regulators. This paper will help them to find out the factors which are influencing the social as well as financial performance of the MFIs.

Keywords: microfinance; panel data; operational self-sufficiency; performance of Asian countries. (search for similar items in EconPapers)
Date: 2020
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