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Efficiency of Microfinance Institutions in Bangladesh

Author

Listed:
  • Shakil Quayes

    (University of Massachusetts Lowell)

  • Baqui Khalily

    (Institute of Microfinance, Dhaka)

Abstract

This study presents an empirical analysis of the cost efficiency of a sample of microfinance institutions (MFIs) operating in Bangladesh. These MFIs substantially vary in size and can also be characterized by their affiliation with donor and funding agencies. Therefore, the measurement of their performance poses an important challenge for the donor agencies and policymakers. Using stochastic frontier models in the measurement of the level of efficiency for the MFIs, the study suggests that larger MFIs are more efficient with some evidence of a trade-off between efficiency and outreach.

Suggested Citation

  • Shakil Quayes & Baqui Khalily, 2014. "Efficiency of Microfinance Institutions in Bangladesh," Economics Bulletin, AccessEcon, vol. 34(3), pages 1512-1521.
    • Handle: RePEc:ebl:ecbull:eb-14-00185
    as

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    References listed on IDEAS

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    1. Berger, Allen N. & Humphrey, David B., 1997. "Efficiency of financial institutions: International survey and directions for future research," European Journal of Operational Research, Elsevier, vol. 98(2), pages 175-212, April.
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    4. Julia Paxton, 2007. "Technical Efficiency in a Semi‐Formal Financial Sector: The Case of Mexico," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 57-74, February.
    5. Rusdy Hartungi, 2007. "Understanding the success factors of micro‐finance institution in a developing country," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(6), pages 388-401, May.
    6. Ben Bassem, 2008. "Efficiency of Microfinance Institutions in the Mediterranean: An Application of DEA," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 15(2), pages 343-354, September.
    7. Paxton, Julia A., 2006. "Technical efficiency in the rural financial sector: evidence from Mexico," Journal of Developing Areas, Tennessee State University, College of Business, vol. 39(2), pages 101-119, January-M.
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    Cited by:

    1. Debashis Sarker, 2015. "Inclusion of disabled people in microfinance institutions: Where does Bangladesh stand?," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 1(1), pages 67-79, April.

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    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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