Performance of Microfinance Institutions in Asia: DEA based Efficiency Analysis

Abstract

— The paper attempted to investigate the comparative performance of microfinance institutions (MFIs) in three Asian countries namely Bangladesh, India and China. Based on data envelopment analysis, best practice MFIs have been identified and their efficiency determinants also have been investigated by using tobit regression analysis. Findings revealed that MFIs in China and India performs more efficiently than that of Bangladesh under constant return to scale technology but under variable return to scale technology MFIs in Bangladesh perform more efficiently than others. Moreover, regression analysis confirms that the performance of MFIs in terms of total assets and financial performance in terms of profitability is critical for sustainable and efficient development of MFIs.