Efficiency and Performance of Microfinance Institutions in Emerging Market after Global Financial Crisis

Abstract

Microfinance Institutions (MFIs) play a crucial role in promoting financial inclusion and socioeconomic advancement, particularly in emerging markets. This study seeks to assess the diverse efficiency and performance aspects of Indian MFIs using Data Envelopment Analysis (DEA). The evaluation covers financial, social, and overall technical efficiency, offering a comprehensive analysis. Data for the research is sourced from the MIX data repository, encompassing 77 Indian MFIs over a span of 9 years from 2010 to 2018 covering the performance of MFIs after Global Financial Crisis. The findings obtained from the DEA Malmquist Index indicate that the efficiency and performance of Microfinance Institutions (MFIs) are significantly influenced by factors such as legal status, profit orientation, and size. The results suggest that aligning with specific internal factors allows MFIs to potentially contribute to societal development through the implementation of appropriate policies.