Efficiency and Sustainability of Micro Finance Institutions in South Asia

Journal Title: Research Journal Social Sciences (Online) - Year 2014, Vol 3, Issue 1

Abstract

The objective of this study has been to estimate the efficiency and sustainability of microfinance institution working in the South Asian countries such as Bangladesh, Pakistan and India. For the efficiency analysis we used non parametric Data Envelopment Analysis. We considered both inputs oriented and output oriented methods by assuming constant returns to scale and variable returns to scale technologies. While conducting DEA analysis using single country data we found that eight MFIs from Pakistan, six MFIs from Bangladesh and five MFIs from India are at the efficient frontier under variable returns to scale. The technical efficiency figures for Pakistan, Bangladesh and India are 0.395, 0.087, and 0.28, respectively, while average pure technical efficiencies for these countries respectively range between 0.713-0.823, 0.175-0.547 and 0.413-0.452. Three countries combine analysis revealed that there are two efficient MFIs under CRS and five efficient MFIs under VRS assumption in these countries. Out of these efficient MFIs three -Annesa, BARC and Grameen Bank, belong to Bangladesh, and two MFIs - Bodhana and Pushtikar, are from India. No MFI from Pakistan was found operating on the efficient frontier. The analysis further reveals that the inefficiencies of MFIs in Pakistan, India and Bangladesd are mainly of technical nature. The results have an important policy implication that in order to improve the efficiency of the MFIs there is need to enhance the managerial skills and improve technology. This could be done by imparting training. Since Grameen Bank is the leading MFIs in the world we can adopt its model according to the country specific requirements. Particularly, the lagging countries like Pakistan and India require special training programs in the field of microfinance management.

Authors and Affiliations

ABDUL QAYYUM, MUNIR AHMAD

Keywords

Related Articles

Child Work and Schooling in Pakistan—To What Extent Poverty and other Demographic and Parental Background Matter?

Keeping into consideration the far-reaching social and economic impact of child work both for the children involved and society as a whole, in this study an attempt has been made to disentangle the child employment and s...

Monetary Policy Stance: Comparison of Different Measures for Pakistan

This paper estimates monetary policy stance measures like Monetary Conditions Index (MCI), Financial Conditions Index (FCI), and Bernanke and Mihov Index (BMI) for Pakistan. The estimated monetary policy stance guides wh...

Comparative Analysis of Factors Affecting Child Mortality in Pakistan

This study is investigated determinants of child mortality in the Pakistan. The Pakistan is amongst one of the five countries who have the highest child mortality rates in the world. Literature on the subject has found e...

Determinants of Child Labour in Khyber Pakhtunkhwa: An Econometric Analysis

This paper examines how child labour is useful for highlighting those factors because of which parents are forced to engage their children in economic activities. The research is based on cross-sectional data collected f...

Role of Solar Energy in Improving the Livelihood of Rural Households: A Case Study of Bajaur Agency

This Study was conducted in a far-flung village of Bajaur agency, where no electricity was available and about two years back a non-government organization provided solar system to each household. The paper intended to e...

Download PDF file
  • EP ID EP289870
  • DOI -
  • Views 127
  • Downloads 0

How To Cite

ABDUL QAYYUM, MUNIR AHMAD (2014). Efficiency and Sustainability of Micro Finance Institutions in South Asia. Research Journal Social Sciences (Online), 3(1), 1-34. https://europub.co.uk/articles/-A-289870