Title: Impact of operational efficiency and innovative business processes on the financial performance of MFIs

Authors: Ambu Sharma; Rajesh Kumar

Addresses: Institute of Business Management, GLA University, Mathura, 281406, India ' Institute of Business Management, GLA University, Mathura, 281406, India

Abstract: This study aims to examine the impact of operational efficiency and innovative business processes on the financial performance of microfinance institutions (MFIs). Recently, numerous MFIs have ceased operations due to ineffective operational processes and cautious business practices. Therefore, the study gathered empirical data from 421 executives of MFIs through purposive sampling. The survey was conducted between January 2023 and September 2023 using adopted and modified scales. The findings indicate that the solvency position, learning and growth, and lending methodology play a significant role in determining the operational efficiency of MFIs. Additionally, social performance, innovative business approaches, and operational efficiency positively impact the financial performance of MFIs. Theoretically, this study contributes by expanding the dimensions of operational efficiency in MFIs and introducing social performance and innovative business approaches to enhance their financial performance. The mediating effects of social performance and innovative business processes are positive and significant.

Keywords: operational efficiency; MFIs; microfinance institutions; innovative business processes; financial performance; social performance.

DOI: 10.1504/IJTE.2024.137532

International Journal of Technoentrepreneurship, 2024 Vol.5 No.1, pp.67 - 89

Received: 29 Oct 2023
Accepted: 12 Feb 2024
Published online: 22 Mar 2024 *

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