Efficiency of microfinance institutions and branch level determinants: empirical evidence from Assam, India

The surge of interest among the development practitioners, multilateral lending agencies, bilateral donor agencies, developing and developed country governments and non-governmental organisations (NGOs), deepen the outreach of microfinance, which call for sustainability and efficiency analysis. Efficiency of microfinance institutions (MFIs) ensure in meeting the objective of reaching out the poor. Using survey data of 18 branch offices of two selected MFIs in Assam, a state of Northeast India, this paper examines determinants of efficiency of branch offices. The estimated results evince that while branch efficiency is negatively affected by operating expense per borrower; average loan size shows a positive effect.