Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
989247 | World Development | 2011 | 11 Pages |
Abstract
SummaryThis paper uses stochastic frontier analysis to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). We find convincing evidence that outreach is negatively related to efficiency of MFIs. More specifically, we find that MFIs that have a lower average loan balance (a measure of the depth of outreach) are also less efficient. Moreover, we find evidence showing that MFIs that have more women borrowers as clients (again a measure of the depth of outreach) are less efficient. These results remain robustly significant after having added a number of control variables.
Keywords
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Authors
Niels Hermes, Robert Lensink, Aljar Meesters,