Social and Financial Efficiencies of Microfinance Institutions

Microfinance institutions (MFIs) have been developed as an alternative solution for alleviation of poverty. They are specialised financial institutions with both social as well as profit motives. This study analyses performance of Indian MFIs based on their financial and social efficiency using data development analysis method. The analysis reveals that for MFIs, the average social performance efficiency is 76.2% and financial performance efficiency is 73.2%. Moreover, it is observed that socially efficient MFIs are not efficient in lending larger loans and this affects their profitability