Outreach and Efficiency of Microfinance Institutions

29 Pages Posted: 12 Jun 2008  

Niels Hermes

University of Groningen - Faculty of Economics and Business

Robert Lensink

University of Groningen - Department of Economics, Econometrics and Finance; Wageningen UR - Development Economics Group

Aljar Meesters

University of Groningen - Faculty of Economics and Business

Date Written: June 1, 2008

Abstract

This paper uses stochastic frontier analysis (SFA) to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). Using a sample of more than 1,300 observations, our study suggests that outreach and efficiency of MFIs are indeed negatively correlated.

Keywords: microfinance, outreach, efficiency, stochastic frontier analysis

JEL Classification: G21, O16, I39, C49

Suggested Citation

Hermes, Niels and Lensink, Robert and Meesters, Aljar, Outreach and Efficiency of Microfinance Institutions (June 1, 2008). Available at SSRN: https://ssrn.com/abstract=1143925 or http://dx.doi.org/10.2139/ssrn.1143925

Niels Hermes (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Robert Lensink

University of Groningen - Department of Economics, Econometrics and Finance ( email )

P.O. Box 800
9700 AH Groningen
Netherlands

Wageningen UR - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands

Aljar Meesters

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

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