Abstract
This is a study of Microfinance Institutions-MFIs of India. It includes analysis
of MFIs of India. This study includes analysis of performance of microfinance
institutions with reference to both financial and non-financial ways.
Performance of microfinance institutions is measured using four parameters,
which are sustainability/profitability, outreach, operational and financial
efficiency. Data is taken of 99 Microfinance Institutions of India from the
Microfinance Information Exchange for a period of 11 years. Variables of this
study are both in absolute and relative terms. The endogenous variables are
Return on Assets and Return on Equity for sustainability, Number of
Borrowers per Staff Member for operational efficiency, Cost per Borrower for
financial efficiency, and Number of Active Borrowers for outreach. Panel data
analysis is done after checking the assumptions of the model. Hausman Test is
applied to find out the suitability of Fixed or Random Effect Model. Both
random and fixed effect were found suitable for application. In addition to this
descriptive analysis of the variables is also done. The results show that most
of the variables used in the study are significant in outreach model; other than
rank, financial revenue to assets ratio, portfolio at risk, deposits, and capital to
assets ratio all other variables are significant in case of sustainability using
ROA model and same variables are found insignificant in ROE model except
financial expense to assets ratio; in financial efficiency model both significant
and insignificant variables are found; and in case of operational efficiency all
variables are found significant.
Muhammad Azhar Ikram Ahmad, Zahid Ahmad, AtherAzim Khan. (2014) PERFORMANCE ANALYSIS OF MICROFINANCE INSTITUTIONS OF INDIA, Paradigms , Vol 8, Issue 1.
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