Book: Microfinance and Public Policy, Outreach, Performance and Efficiency
United Kingdom, December, 19 2007 -
This book invites aid agencies and governments to consider efficiency as a more robust and reliable criterion that should guide their decisions on continuing or discontinuing support microfinance institutions (MFIs).
Efficiency is a criterion that helps discriminate with greater accuracy than financial performance alone between support-worthy and underperforming MFIs, irrespective of the overall orientation of the MFI. An MFI can be more or less efficient in reaching many poor people with on average small transactions, as an MFI can equally be more or less efficient if it seeks positive financial results in the shortest term possible. Support-worthy are both as long as they are on or near the efficiency frontier or moving towards it, for a given production function and in a given operating environment.