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Microfinance during Financial Crisis: Evidence from Bangladesh

Author

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  • Syedah Shan E Ahmad

    (Faculty of Economics and Management Sciences, The Women University, Multan, Pakistan)

Abstract

Purpose: The study scrutinizes the efficiency and sustainability of Microfinance Institutions in Bangladesh during financial crisis era for 2008 and 2009. Methodology: For this progression, firstly Data Envelopment Analysis is applied to quantify efficiency and then sustainability check is tested. The very huge and huge MFIs have been traditionally found very profitable. Findings: Portfolio quality also appears to be in down turn. As time passes smaller MFIs have stretched their operations and arrive at financial viability. Recommendations: The issue that made most contributes are management cost control, reasonable cost of capital and economies of scale (expanding portfolio), particularly subsidized finances and low cost reserves.

Suggested Citation

  • Syedah Shan E Ahmad, 2015. "Microfinance during Financial Crisis: Evidence from Bangladesh," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(6), pages 262-270, June.
    • Handle: RePEc:ijr:journl:v:3:y:2015:i:6:p:262-270
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    References listed on IDEAS

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    4. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos & Mar Molinero, Cecilio, 2007. "Microfinance institutions and efficiency," Omega, Elsevier, vol. 35(2), pages 131-142, April.
    5. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
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    More about this item

    Keywords

    Bangladesh; Efficiency; Financial crisis; Sustainability; Microfinance institutions;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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