Social and financial efficiency of Islamic microfinance institutions: a Data Envelopment Analysis application

Indra Widiarto, Ali Emrouznejad*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Microfinance has been developed as alternative solution for global poverty alleviation effort in the last 30 years. Microfinance institution (MFI) has unique characteristic wherein they face double bottom line objectives of outreach to the poor and financial sustainability. This study proposes a two-stage analysis to measure Islamic Microfinance institutions (IMFIs) performance by comparing them to conventional MFIs. First, we develop a Data Envelopment Analysis (DEA) framework to measure MFIs' efficiency in its double bottom line objectives, i.e. in terms of social and financial efficiency. In the second stage non-parametric tests are used to compare the performance and identify factors that contribute to the efficiency of IMFIs and MFIs.

Original languageEnglish
Pages (from-to)1-17
Number of pages17
JournalSocio-economic planning science
Volume50
Early online date27 Jan 2015
DOIs
Publication statusPublished - Jun 2015

Bibliographical note

© 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

  • Data Envelopment Analysis
  • efficiency
  • Islamic microfinance
  • microfinance institutions
  • performance measurement

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