No abstract

Efficiency analysis of the Partner Organizations can benefit all the microfinance sector's key stakeholders to benchmark the current scene and formulate optimal policy agenda. This study seeks to measure the partner organizations of the Pakistan Poverty Alleviation Fund's social and financial efficiency and to identify causes and sources of their inefficiencies. A non-parametric technique known as Data Envelopment Analysis is applied to investigate the Partner Organizations' efficiency throughout 2005–2015. The required data was obtained from the database of the Mix-Market and Pakistan Microfinance Network. The social and financial efficiency was estimated assuming Constant Return to Scale, Variable Return to Scale, and with respect to the Operational Scale of the Partner Organizations. Results revealed that the partner organizations are more scale efficient (median = 75%) than pure technically efficient (median = 55%). Further, graphical representations show a decreasing linear trend and negative serial correlation in the percentage of efficient partner organizations. The model fit results show that institutional characteristics that influence partner organizations' efficiencies significantly include their age, Operational Self-Sufficiency, personnel, loan officers, assets and debt. Finally, the diagnostic tests for endogeneity, heteroskedasticity, heterogeneity, and cross-sectional dependence were performed.

The shift of the Microfinance Institutions (MFIs) from the povertylending approach to the financial system approach is likely to have two counterbalancing effects on the social mission of poverty alleviation and women empowerment. On the one handand as is desirablefinancial sustainability could cause MFIs to increase the depth and breadth of their outreach. But on the other handand possibly at the cost of the social missionfinancial sustainability may become the core objective of the MFIs. The aim of this paper is to investigate which of the two outcomes is most likely in MFIs following the financial system approach. For this purpose, the paper first develops a theoretical framework to deduce testable hypotheses. The hypotheses are then tested with data from 158 rated MFIs, using various panel data estimation techniques. Results obtained thus reveal that majority of the MFIs in developing countries hold some market power. Besides, we find that financial sustainability is at odds with the social mission of alleviating poverty and empowering women and does not translate into depth and breadth of outreach. The study also discusses some policy implications of the results.

No abstract

No abstract