Article: Drivers of performance of the microfinance institutions in selected South Asian countries Journal: International Journal of Economics and Accounting (IJEA) 2020 Vol.9 No.2 pp.155 - 179 Abstract: Microfinance institutions (MFIs) have been successfully operating for poverty alleviation and have played significant role in providing financial inclusion. This paper mainly tries to find out the performance drivers of the MFIs by using the data on 91 MFIs in seven selected Asian countries (Afghanistan, Pakistan, India, Bangladesh, Vietnam, Thailand, Indonesia) over the period 2004–2013 which have different backgrounds of evolution of MFIs. After panel data analysis it is found that MFI specific variables like real yield on gross loan portfolio is positively influencing return on assets (ROA), operational self-sufficiency (OSS) and percent of female borrower but cost per borrower is negatively influencing all the dependent variables. Regulatory quality of the country has positive influence on ROA and profit at margin of the MFIs. Domestic credit and growth of gross domestic product (GDP) per capita have positive impact on percent of women borrower, the representative of the social variable. This paper is important to the investors of MFI institutions, policy makers and regulators. This paper will help them to find out the factors which are influencing the social as well as financial performance of the MFIs. Inderscience Publishers - linking academia, business and industry through research

Title: Drivers of performance of the microfinance institutions in selected South Asian countries

Authors: Chandralekha Ghosh; Ankana Das

Addresses: Department of Economics, West Bengal State University, Barasat, North 24 Pgs., West Bengal, India ' Umeschandra College, 13, Surya Sen Street, Kolkata – 700012, West Bengal, India; Affiliated to: University of Calcutta, 87, 1, College St, Calcutta University, College Square, Kolkata, West Bengal 700073, India

Abstract: Microfinance institutions (MFIs) have been successfully operating for poverty alleviation and have played significant role in providing financial inclusion. This paper mainly tries to find out the performance drivers of the MFIs by using the data on 91 MFIs in seven selected Asian countries (Afghanistan, Pakistan, India, Bangladesh, Vietnam, Thailand, Indonesia) over the period 2004–2013 which have different backgrounds of evolution of MFIs. After panel data analysis it is found that MFI specific variables like real yield on gross loan portfolio is positively influencing return on assets (ROA), operational self-sufficiency (OSS) and percent of female borrower but cost per borrower is negatively influencing all the dependent variables. Regulatory quality of the country has positive influence on ROA and profit at margin of the MFIs. Domestic credit and growth of gross domestic product (GDP) per capita have positive impact on percent of women borrower, the representative of the social variable. This paper is important to the investors of MFI institutions, policy makers and regulators. This paper will help them to find out the factors which are influencing the social as well as financial performance of the MFIs.

Keywords: microfinance; panel data; operational self-sufficiency; performance of Asian countries.

DOI: 10.1504/IJEA.2020.105207

International Journal of Economics and Accounting, 2020 Vol.9 No.2, pp.155 - 179

Received: 16 Dec 2018
Accepted: 18 May 2019
Published online: 14 Feb 2020 *

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Title: Drivers of performance of the microfinance institutions in selected South Asian countries

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