Abstract
The microfinance sector has room for pure for-profit microfinance institutions (MFIs), non-profit organizations, and “social” for-profit firms that aim to pursue a double bottom line. Depending on their business model, these institutions target different types of borrowers, change the size of their loans and adjust their loan pricing. We introduce a simple approach that accommodates a wide range of business models and allows us to estimate the operational efficiency of MFIs. Our empirical results show that MFIs with a high depth of outreach are most efficient, resulting in higher levels of outreach and profits for the same input mix.
Original language | English |
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Pages (from-to) | 28-42 |
Journal | World Development |
Volume | 70 |
DOIs | |
Publication status | Published - Jun 2015 |
Keywords
- microfinance
- output distance function
- outreach
- efficiency
- global