Abhigyan

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Efficiency Determinants of Microfinance Institutions in India: An Indicative DEA Approach


Affiliations
1 Department of Commerce, Assam University, Silchar, Assam, India
     

   Subscribe/Renew Journal


Microfinance Institutions provide financial support to the deprived sections of the society, who are unable to receive formal banking facilities, and thus is considered an integral part for developing an economy. Talking about India, where till date a large mass of population is poor, uneducated, deprived of formal banking services, Microfinance Institutions works as bridge in filling up the gap between such underprivileged population and the formal banking system. Recently the studies on efficiency of Microfinance institutions have received wider attention. Therefore, it is felt relevant to study the efficiency of such institution in Indian context. Besides efficiency, this paper also attempts to identify the determinants of efficiency and specifically answers whether 'sustainability' has any significant impact on efficiency. Relevant data are collected through secondary source from thirty-one Indian Microfinance Intuitions and non-parametric Data Envelopment Analysis (DEA) is used for gauging the efficiency, thereafter, tobit regression is used to identify the determinants of efficiency.


Keywords

Microfinance Institutions, India, Data Envelopment Analysis, Sustainability, Self-Sufficiency.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Canhoto A., & Dermine, J. (2002). A note on banking efficiency in Portugal, new vs. old banks. Journal of Banking and Finance, 27(11), 2087-2098.

  • Fare.R., Grosskoph.S., Norris. M., & Zhang. Z. (1994). Productivity growth, technical progress and efficiency change in industrialized countries. The American Economic Review, 84 (1), 66-83.

  • Gupta.O.K., Doshit.Y., & Chinubhai.A. (2008). Dynamics of productive efficiency of Indian banks. International Journal of Operations Research, 2, 72-90.

  • Haq.M., Skully.M., & Pathan.S (2010). Efficiency of micro finance institutions: A data envelopment analysis. Asia-Pacific Financial Markets, 17(1), 63-97.

  • India's 25 leading MFIs, CRISIL Ratings, June 2014. Rerieved from www.microfinancegateway.org/library/india's-25leading-mfis.

  • Kipesha. E.F. (2013). Production and intermediation efficiency of microfinance institutions in Tanzania. Research Journal of Financel and Accounting, 4(1), 149-159.

  • Marakkath. N. (2014). Sustainability of Indian microfinance institutions: A mixed model approach. Indian Studies in Business and Economics. India.: Springer.

  • Nieto. B.G., Cinca. C.S., & Molinero. C.M. (2005). Microfinance institutions and efficiency. Omega the International Journal of Management Science, 35, 131-142.

  • Nieto. B.G., Cinca. C.S., & Molinero. C.M. (2009). Social efficiency in microfinance institutions The Journal of the Operational Research Society, 60 (1), 104-119.

  • Pasupathy K.S. (2002). Modeling undesirable outputs in data envelopment analysis : Various approaches. Unpublished master's thesis, Faculty of the Virginia Polytechnic Institute and State University, USA.

  • Quayes.S., & Khalily.B. (2014). Efficiency of microfinance institution in Bangladesh. Economics Bulletine. 34, 1512-1521.

  • Sa-Dhan Microfinance Manager Series: Technical Note 13 . Retrieved from http://www.sadhan.co.in/Adls/Technicalnotes/Technical_Notes_13.pdf.

  • Sahoo. B. K., Sengupta.J. K., & Mandal. A. (2007). Productive performance evaluation of the banking sector in India using data envelopment analysis. International Journal of Operations Research. 4(2), 67-79.

  • Soterriou. A., & Zenios.S.A. (1997). Efficiency, profitability and quality of banking services. Wharton Financial Institutions Center.

  • Thanassoulis E., & Boussofiane, A. (1996). A comparison of data envelopment analysis and ratio analysis as tools for performance assessment. Omega International Journal for Management Science, 24(3), 229-244.

  • Worthington. A.C. (1998). The determinants of non-bank financial institution efficiency: A stochastic cost frontier approach. Applied Financial Economics. 8(3), 279-289.


Abstract Views: 346

PDF Views: 1




  • Efficiency Determinants of Microfinance Institutions in India: An Indicative DEA Approach

Abstract Views: 346  |  PDF Views: 1

Authors

Santa Kar
Department of Commerce, Assam University, Silchar, Assam, India
Joyeeta Deb
Department of Commerce, Assam University, Silchar, Assam, India

Abstract


Microfinance Institutions provide financial support to the deprived sections of the society, who are unable to receive formal banking facilities, and thus is considered an integral part for developing an economy. Talking about India, where till date a large mass of population is poor, uneducated, deprived of formal banking services, Microfinance Institutions works as bridge in filling up the gap between such underprivileged population and the formal banking system. Recently the studies on efficiency of Microfinance institutions have received wider attention. Therefore, it is felt relevant to study the efficiency of such institution in Indian context. Besides efficiency, this paper also attempts to identify the determinants of efficiency and specifically answers whether 'sustainability' has any significant impact on efficiency. Relevant data are collected through secondary source from thirty-one Indian Microfinance Intuitions and non-parametric Data Envelopment Analysis (DEA) is used for gauging the efficiency, thereafter, tobit regression is used to identify the determinants of efficiency.


Keywords


Microfinance Institutions, India, Data Envelopment Analysis, Sustainability, Self-Sufficiency.

References