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Social Efficiency in Peruvian Microfinance Institutions: a semi-parametric approach

Author

Listed:
  • Giovanna Aguilar

    (Departamento de Economía - Pontificia Universidad Católica del Perú)

  • Jhonatan Claussen

    (Departamento de Economía - Pontificia Universidad Católica del Perú)

Abstract

This study aims to assess the social efficiency of microfinance institutions (MFIs) —regulated and non-regulated— in Peru. Social efficiency is referred to the capacity of MFIs to produce more social outputs —number of poor clients and women served— without using more resources. The Data Envelopment Analysis methodology is used to carry on efficiency analysis. Additionally, we analyze the potential determinants of social efficiency of MFIs through a Tobit regression analysis in the context of panel data, in order to investigate whether differences related to the institutional nature of MFIs explain differences in social efficiency achieved by them. The study period covers the years from 2007 to 2011. The results show that non-regulated MFIs are socially more efficient. On the contrary, those MFIs which are within regulatory scheme, shown in most cases, distant positions to the efficient frontier. Regression analysis shows that being a regulated MFI negatively affects social efficiency levels, a greater presence in rural area positively affect social efficiency levels. Although there is evidence that financial returns could relate positively to social efficiency, this result does not seem to be as robust. At the other extreme, the lending technology does not seem to be relevant to explain social efficiency.

Suggested Citation

  • Giovanna Aguilar & Jhonatan Claussen, 2013. "Social Efficiency in Peruvian Microfinance Institutions: a semi-parametric approach," Documentos de Trabajo / Working Papers 2013-358, Departamento de Economía - Pontificia Universidad Católica del Perú.
  • Handle: RePEc:pcp:pucwps:wp00358
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    Cited by:

    1. Waldo Mendoza, 2013. "The IS-LM-BB: a model of unconventional monetary policy," Documentos de Trabajo / Working Papers 2013-366, Departamento de Economía - Pontificia Universidad Católica del Perú.

    More about this item

    Keywords

    Microfinance; Social Efficiency; Efficiency frontiers; DEA analysis;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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