A Comparative Integration Study of Performance Metrics in Microfinance: Grameen Bank vs. Cooperative Bank

Mehree Iqbal (), Nabila Nisha and Afrin Rifat
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Nabila Nisha: North South University, Bangladesh
Afrin Rifat: North South University, Bangladesh

International Journal of Information Systems in the Service Sector (IJISSS), 2020, vol. 12, issue 3, 55-73

Abstract: This study aims to understand the cause-and-effect relationship between financial and non-financial measures under a balanced scorecard (BSC) model in the microfinance sector of Bangladesh. Structural equation modeling is employed to test non-financial relationships hypothesized under BSC model and one sample t-tests are conducted to further relate non-financial variables to the financial performance variable for two microfinance providers. While all non-financial variables share positive and significant relationships, findings show that customer perspective and internal business process factors are quite strong and more evident for Grameen Bank than a cooperative bank. As such, microfinance providers which will improve their non-financial perspectives can ultimately benefit from increased financial performance. The article draws attention to microfinance providers so that they can address shortcomings in their current performance measurement systems and identify mechanisms that can help them improve their financial performances. Implications and future directions are discussed too.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jisss0:v:12:y:2020:i:3:p:55-73

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