Efficiency of Microfinance Institutions in India for Poverty Alleviation

ABSTRACT. This Study measures the efficiency and its determinants of a heterogeneous sample of microfinance institutions operating in India. We apply a stochastic frontier approach to unbalanced panel of 40 microfinance institutions for the period 2005-08. The mean efficiency level of microfinance institutions is low but it increases over the period of study. Age and size of microfinance institutions are positive determinant of efficiency level. Our analysis shows trade-off between poverty outreach and efficiency. pp. 64–78