Efficiency of Microfinance Institutions in India: A Two-Stage DEA Approach. (April 2019)

• Record Type: Journal Article
• Authors: Sinha, Ram Pratap; Pandey, Pallavi
• Is Part Of: International journal of rural management. Volume 15:Number 1(2019:Jun.)
• Page Start: 49
• Page End: 77
• Publication Date: 2019-04
• Subjects: Bootstrap -- DEA -- microfinance -- NGOs -- truncated regression -- two-stage estimation; Rural development -- Management -- Periodicals; Rural development projects -- Periodicals; 307.1412
• DOI: 10.1177/0973005219832494
• Languages: English
• ISSNs: 0973-0052

Abstract

The present study uses robust data envelopment analysis to estimate the performance of 30 Indian microfinance institutions (MFIs) from 2008–2009 to 2015–2016. Due to the non-availability of information in some instances, the present study uses an unbalanced panel of observations. In the matter of evaluation of performance, the study makes a major departure from the extant studies undertaken in the Indian context and adopts a double bootstrap approach originally suggested by Simar and Wilson. The current approach thus evaluates conditional performance of the in-sample MFIs in the presence of capital-to-asset ratio as an environmental variable. The two-stage estimation also involved the estimation of the influence of capital-to-asset ratio on the reciprocal of efficiency scores, and contrary to the expectations, the relationship was found to be positive.