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Productivity change of microfinance institutions in Kenya: A bootstrap Malmquist approach

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  • Wijesiri, Mahinda
  • Meoli, Michele

Abstract

This paper uses a DEA (Data Envelopment Analysis) based Malmquist approach to investigate the changes in productivity of 20 Kenyan microfinance institutions (MFIs) over the period 2009–2012. A bootstrap procedure is employed to determine whether the changes in Malmquist index and its components are statistically significant. Results show that MFIs have experienced about 7% annual productivity progress on average, which is mainly attributable to technological advances. A second-stage bootstrapped regression analysis is employed to examine the impact of several environmental variables on productivity change measures. Results show that matured MFIs tend to have a lower productivity compared to their younger counterparts. Results also reveal that higher return-on-assets associates with the productivity gain and technological improvements.

Suggested Citation

  • Wijesiri, Mahinda & Meoli, Michele, 2015. "Productivity change of microfinance institutions in Kenya: A bootstrap Malmquist approach," Journal of Retailing and Consumer Services, Elsevier, vol. 25(C), pages 115-121.
    • Handle: RePEc:eee:joreco:v:25:y:2015:i:c:p:115-121
    DOI: 10.1016/j.jretconser.2015.04.004
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