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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

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. Copyright © 2008 The Authors Journal compilation © CIRIEC 2008.

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
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    Cited by:

    1. 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.
    2. repec:gam:jsusta:v:10:y:2018:i:4:p:1128-:d:140258 is not listed on IDEAS
    3. Annabel Vanroose & Bert D’Espallier, 2009. "Microfinance and Financial Sector Development," Working Papers CEB 09-040.RS, ULB -- Universite Libre de Bruxelles.
    4. 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.
    5. 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.
    6. 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.

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