Title: Multi-criteria approach to sustainability evaluation of Indian MFIs – a well-being perspective

Authors: Ethi Jain; Pankaj Kumar Gupta

Addresses: Centre for Management Studies, Jamia Millia Islamia University, New Delhi, 110025, India ' Centre for Management Studies, Jamia Millia Islamia University, New Delhi, 110025, India

Abstract: Microfinance institutions (MFIs) play an important role in poverty reduction and well-being of masses in developing countries like India. There is a tremendous increase in the size and operations of MFIs which has raised the issue of their sustainability. We have developed an approach to examine the sustainability of 50 Indian MFIs using an integration of: 1) technique for order of preference by similarity to ideal solution (TOPSIS); 2) data envelopment analysis (DEA). The results of regressions on the selected sustainability parameters performed on microfinance information exchange (MIX) database shows that sustainability scores range from low to moderate and the determinants that significantly impact the sustainability of MFIs are number of active borrowers (NAB). However, assets, portfolio at risk, operating profits are insignificant. We establish that the integrated approach is effective in combining the efficiency and ranking criterion in evaluating the sustainability of Indian MFIs.

Keywords: well-being; sustainability; microfinance institutions; MFIs; data envelopment analysis; DEA; TOPSIS.

DOI: 10.1504/IJPSPM.2023.130262

International Journal of Public Sector Performance Management, 2023 Vol.11 No.3, pp.365 - 385

Received: 15 Feb 2020
Accepted: 07 Jun 2020
Published online: 14 Apr 2023 *

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