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Performance Analysis For A Sample Of Microfinance Institutions In India

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  • Alain De CROMBRUGGHE
  • Michel TENIKUE
  • Julie SUREDA

Abstract

ABSTRACT**: We use regression analysis to study the determinants of self‐sustainability of a sample of microfinance institutions in India. These institutions stand out by their ability and willingness to report financial and operational data to Sa Dhan, a know‐how sharing organization. We investigate particularly three aspects of sustainability: cost coverage by revenue, repayment of loans and cost‐control. Our results suggest that the challenge of covering costs on small and partly unsecured loans can indeed be met, without necessarily increasing the size of the loans or raising the monitoring cost. The analysis suggests other ways to improve the financial results, like a better targeting of the interest rate policy or increasing the number of borrowers per field officer especially in collective delivery models.

Suggested Citation

  • Alain De CROMBRUGGHE & Michel TENIKUE & Julie SUREDA, 2008. "Performance Analysis For A Sample Of Microfinance Institutions In India," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(2), pages 269-299, June.
    • Handle: RePEc:bla:annpce:v:79:y:2008:i:2:p:269-299
    DOI: 10.1111/j.1467-8292.2008.00362.x
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    Cited by:

    1. Ahmad Nawaz & Sana Iqbal & Sadaf Ehsan, 2018. "Does Social Performance Drive Corporate Governance Mechanism In Case of Asian MFIs? An Issue of Endogeneity," Global Business Review, International Management Institute, vol. 19(4), pages 988-1012, August.
    2. Nawaz, Ahmad & Iqbal, Sana, 2015. "Financial Performance And Corporate Governance In Microfinance: Who Drives Who? An Evidence From Asia," MPRA Paper 65327, University Library of Munich, Germany.
    3. Zhiping Chen & Xinkai Zhuang & Jia Liu, 2019. "A Sustainability-Oriented Enhanced Indexation Model with Regime Switching and Cardinality Constraint," Sustainability, MDPI, vol. 11(15), pages 1-14, July.
    4. Zongxin Li & Xinge Li & Yongchang Hui & Wing-Keung Wong, 2018. "Maslow Portfolio Selection for Individuals with Low Financial Sustainability," Sustainability, MDPI, vol. 10(4), pages 1-11, April.
    5. Iqbal, Sana & Nawaz, Ahmad & Ehsan, Sadaf, 2019. "Financial performance and corporate governance in microfinance: Evidence from Asia," Journal of Asian Economics, Elsevier, vol. 60(C), pages 1-13.
    6. Isabel Sainz-Fernandez & Begoña Torre-Olmo & Carlos López-Gutiérrez & Sergio Sanfilippo-Azofra, 2018. "Development of the Financial Sector and Growth of Microfinance Institutions: The Moderating Effect of Economic Growth," Sustainability, MDPI, vol. 10(11), pages 1-16, October.
    7. Annabel Vanroose & Bert D’Espallier, 2009. "Microfinance and Financial Sector Development," Working Papers CEB 09-040.RS, ULB -- Universite Libre de Bruxelles.
    8. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    9. Mira Nurmakhanova & Gavin Kretzschmar & Hassouna Fedhila, 2015. "Trade-off between financial sustainability and outreach of microfinance institutions," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 231-250, December.
    10. M Nadiya & Francisco Olivares-Polanco & T Radha Ramanan, 2012. "Dangers in Mismanaging the Factors Affecting the Operational Self-Sustainability (OSS) of Indian Microfinance Institutions (MFIs) - An Exploration into Indian Microfinance Crisis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(3), pages 448-462, July.
    11. Nawaz, Ahmad & Iqbal, Sana, 2015. "Does Social Performance Drives Corporate Governance Mechanism in MFIs? An Issue of Endogeneity," MPRA Paper 65312, University Library of Munich, Germany.
    12. repec:mth:ijafr8:v:9:y:2019:i:1:p:317-339 is not listed on IDEAS
    13. Aruna Balammal & R. Madhumathi & M.P. Ganesh, 2016. "Pentagon Performance Model of Indian MFIs," Paradigm, , vol. 20(1), pages 1-13, June.
    14. Hermes, Cornelis & Hudon, M., 2018. "Determinants of the Performance of Microfinance Institutions: A Systematic Review," Research Report 2018008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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