This paper uses a large panel data set covering 70 MFIs in 25 Sub‐Saharan African countries to analyze the efficiency of MFIs. This is important, given that MFIs have to operate efficiently to fulfil its dual mission of serving the poor and being sustainable. The results reveal that MFIs are inefficient in meeting the goals of either providing microfinance related services to their clients or intermediating funds between borrowers and depositors. The MFIs lack ability to reach efficient sizes of their performing loan portfolio at the same time they reach an efficient number of clients served.