Financial Efficiency and Social Impact of Microfinance Institutions
Publication typeJournal article with impact factor
Publication Begin page197
Publication End page210
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AbstractThis paper contributes to the literature by investigating whether the increased focus on financial self-sustainability of microfinance institutions has been disadvantageous to the target audience. We investigate the association between social efficiency and financial performance using a comprehensive data set that includes 650 microfinance institutions. A self-organizing map methodology is used to fully capture the existing heterogeneity among institutions. The results show that we cannot support the hypothesis that there exists a trade-off. On the contrary, we find evidence of a significant, positive relationship between social efficiency and financial performance.
KeywordMicrofinance, Self-organizing Maps, Outreach, Social Impact, Profitability, Self-sustainability
Knowledge Domain/IndustryAccounting & Finance