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Assessing the Overall Performance of Microfinance Institutions

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  • Chrysovalantis Gaganis

    (Department of Economics, University of Crete, Greece)

Abstract

In recent years, there has been a growing interest in microfinance institutions (MFIs). Some studies assess the financial condition of MFIs on the basis of individual criteria while a few others attempt to explain differences in profitability on the basis of firm-level attributes and country-level characteristics. However, there is no widely accepted measure for assessing the performance of MFIs. The present study employs a two stage analysis. In the first stage, I propose the use of the PROMETHEE II multicriteria method. This allows the evaluation of the overall performance of the MFIs. In the second stage of the analysis, I use regression analysis to explain differences in the overall performance of the MFIs on the basis of various country-specific characteristics. The results show that the size of the MFIs has a robust non-linear, inverted U-shaped impact on overall performance. Age and the status of non-governmental institution also appear to matter. As it concerns the country-level attributes, GDP growth has a robust positive impact on overall performance. Regional differences also appear to matter.
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Suggested Citation

  • Chrysovalantis Gaganis, 2016. "Assessing the Overall Performance of Microfinance Institutions," Working Papers 1603, University of Crete, Department of Economics.
    • Handle: RePEc:crt:wpaper:1603
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    References listed on IDEAS

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    3. Hafezali Iqbal Hussain & Katarzyna Szczepanska-Woszczyna & Fakarudin Kamarudin & Nazratul Aina Mohamad Anwar & Mohd Haizam Mohd Saudi, 2021. "Unboxing the black box on the dimensions of social globalisation and the efficiency of microfinance institutions in Asia," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 557-592, September.

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    More about this item

    Keywords

    microfinance; performance; Promethee II;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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