Scales and technical efficiencies in Middle East and North African (MENA) micro financial institutions
Purpose - The purpose of this paper is to investigate technical and scales efficiencies of MFIs in Middle East and North Africa (MENA) countries in provision of financial services. This study also aims at tracing the source of inefficiencies. Design/methodology/approach - This paper uses the non-parametric data envelopment analysis (DEA) approach to estimate the production technology for the set of MENA MFIs. The paper uses DEA because it allows us to perform analyses with small samples, which is the case for MENA, and also allows us to calculate Malmquist indexes to characterize productivity changes. Moreover, DEA does not require a production function to calculate the efficiency. It attempts to determine the efficiency of the firm against some imposed benchmark through mathematical programming. Findings - The paper finds low technical efficiency for all MFIs under both intermediation and the production approaches of DEA methodology. This means that MFIs are wasting input resources (input oriented inefficient) and are not producing enough outputs (making loan, raising funds, and obtaining more borrowers per staff). The paper also does not find any improvement in those efficiencies during the period 2000-2005. Originality/value - The study contributes to the existing MFIs literature by pursuing an empirical and decomposition analysis of efficiency by employing two approaches of DEA methodology to trace the sources of inefficiencies which the managers, practitioners and policy makers need to focus on. DEA has been used as a tool to select the right mix of inputs and outputs to assist in tracing the sources of inefficiencies
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 5 (2012)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=imefm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fare,Rolf & Grosskopf,Shawna & Lovell,C. A. Knox, 2008.
Cambridge University Press, number 9780521072069, December.
- Isik, Ihsan & Kabir Hassan, M., 2003. "Financial deregulation and total factor productivity change: An empirical study of Turkish commercial banks," Journal of Banking & Finance, Elsevier, vol. 27(8), pages 1455-1485, August.
- Isik, Ihsan & Hassan, M. Kabir, 2002. "Technical, scale and allocative efficiencies of Turkish banking industry," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 719-766, April.
- Qayyum, Abdul & Ahmad, Munir, 2006. "Efficiency and Sustainability of Micro Finance," MPRA Paper 11674, University Library of Munich, Germany.
- 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.
- Kabir Hassan, M. & Tufte, David R., 2001. "The X-Efficiency of a Group-Based Lending Institution: The Case of the Grameen Bank," World Development, Elsevier, vol. 29(6), pages 1071-1082, June.
When requesting a correction, please mention this item's handle: RePEc:eme:imefpp:v:5:y:2012:i:2:p:157-170. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.