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Performance of Microfinance Institutions: A Review∗

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Handbook of Production Economics

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Abstract

This review covers current issues that applied researchers assessing the performance of MFIs are likely to encounter and should be cognizant of.

We would like to thank Erika Schutt Pardo for comments on an earlier version of this chapter. All errors are ours alone.

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Notes

  1. 1.

    Nonparametric methods can also be deployed.

  2. 2.

    Prominent examples include [21, 66, 75, 86].

  3. 3.

    Almost no studies of MFI efficiency collect data by hand from MFIs. Hartarska [64] is one example that looks at performance of MFIs based on governance where the data is hand collected.

  4. 4.

    This is true for earlier versions; in later years of data collection as more MFIs understood that reporting to MIX is a good way to attract investors and soft credits and grants, it has become less so.

  5. 5.

    https://cersem.uia.no/dataset/

  6. 6.

    https://www.european-microfinance.org/

  7. 7.

    We note that the Diamond data are no longer available via the world bank MIX Market database.

  8. 8.

    Hartarska et al. [68] use the number of clients (borrowers and savers) which equals the number of borrowers in lending-only MFIs but captures better the output of savings-and-loans MFIs.

  9. 9.

    When one includes quasi fixed inputs, e, then \(RTS=\frac {1-\partial \ln \mathcal {C}/\partial \ln \boldsymbol {e}}{\sum \limits ^M_{m=1}\frac {\partial \ln \mathcal {C}}{\partial \ln y_m}}\).

  10. 10.

    This is not to say that subsidization does not exist however; [40] find that subsidies are still pervasive in the industry, representing on average 13 cents per dollar lent across all MFIs.

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Authors and Affiliations

  1. Department of Economics, University of Miami, Miami, FL, USA

    Christopher F. Parmeter

  2. Auburn University, Auburn, AL, USA

    Valentina Hartarska

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  1. Department of Economics, University of Connecticut, Storrs, CT, USA

    Subhash C. Ray

  2. Department of Agricultural and Resource Economics, University of Maryland, College Park, MD, USA

    Robert Chambers

  3. Department of Economics, Binghamton University, Binghamton, NY, USA

    Subal Kumbhakar

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Parmeter, C.F., Hartarska, V. (2021). Performance of Microfinance Institutions: A Review∗. In: Ray, S.C., Chambers, R., Kumbhakar, S. (eds) Handbook of Production Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-3450-3_33-1

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  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-10-3450-3

  • Online ISBN: 978-981-10-3450-3

  • eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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