Mission Drift or SpecializationDeterminants of Financial and Social Efficiency of Microfinance Institutions in Ecuador

  1. Cristina Nataly Cadena-Palacios 1
  2. Manuel Fernandez-Grela 2
  1. 1 Tantanakushka Warmikunapac - CACMU Ltda.
  2. 2 usc
Revista:
Documentos de Traballo. Análise Económica

ISSN: 1138-0713

Ano de publicación: 2018

Número: 67

Páxinas: 1-22

Tipo: Documento de traballo

DIALNET GOOGLE SCHOLAR lock_openAcceso aberto editor

Outras publicacións en: Documentos de Traballo. Análise Económica

Resumo

In this paper, we analyse the factors that influence both financial and social performance of MFIs in Ecuador, in order to detect mission drift. The methodology applied is a two-stage Data Envelopment Analysis (DEA) using a balanced panel of 35 MFIs belonging to the Red Financiera Rural (RFR), a national network, for the period 2010-2016. Our results are consistent with the hypothesis of mission drift and point to the key role of the lending methodology in driving the efficiency score results. Individual lending shows a significant positive effect on financial efficiency scores and a significant negative effect on social efficiency scores.

Referencias bibliográficas

  • Abdelkader, I. B., Hathroubi, S., and Jemaa, M. M. B. (2014). Microfinance institutions’ efficiency in the MENA region: A bootstrap-DEA approach. Research Journal of Finance and Accounting, 5(6):179–191.
  • Adler, N. and Yazhemsky, E. (2010). Improving discrimination in Data Envelopment Analysis: PCA–DEA or variable reduction. European Journal of Operational Research, 202(1):273–284.
  • Annim, S. K. (2012). Microfinance efficiency: trade-offs and complementarities between the objectives of microfinance institutions and their performance perspectives. The European Journal of Development Research, 24(5):788–807.
  • Armend´ariz, B. and Morduch, J. (2010). The Economics of Microfinance. MIT Press. Armend´ariz, B. and Szafarz, A. (2011). On mission drift in microfinance institutions. In Armendariz, B. and Labie, M., editors, Handbook of Microfinance. London-Singapore: World Scientific Publishing, 0-29.
  • Athanassopoulos, A. D. (1997). Service quality and operating efficiency synergies for management control in the provision of financial services: Evidence from Greek bank branches. European Journal of Operational Research, 98(2):300–313.
  • Banker, R. D. and Natarajan, R. (2008). Evaluating contextual variables affecting productivity using Data Envelopment Analysis. Operations Research, 56(1):48–58 . Bassem, B. S. (2008). Efficiency of microfinance institutions in the Mediterranean: An application of DEA. Transition Studies Review, 15(2):343–354.
  • B´ed´ecarrats, F., Gu´erin, I., and Roubaud, F. (2015). The gold standard for randomised evaluations: From discussion of method to political economy. Working Papers CEB 15.
  • Berger, A. N. and Humphrey, D. B. (1997). Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research, 98(2):175–212.
  • Berger, M., Goldmark, L., and Sanabria, T. M. (2006). An Inside View of Latin American Microfinance. IDB.
  • Bibi, U., Balli, H. O., Matthews, C. D., and Tripe, D. W. (2017). Impact of gender and governance on microfinance efficiency. Journal of International Financial Markets, Institutions and Money.
  • CAF (2011). Servicios Financieros para el Desarrollo: Promoviendo el Acceso en Am´erica Latina. CAF. Banco de Desarrollo de Am´erica Latina.
  • Cinca, C. S. and Molinero, C. M. (2004). Selecting DEA specifications and ranking units via PCA. Journal of the Operational Research Society, 55(5):521–528.
  • Cohen, J. (1992). A power primer. Psychological Bulletin, 112(1):155.
  • Copestake, J. (2007). Mainstreaming microfinance: Social performance management or mission drift? World Development, 35(10):1721–1738.
  • Corn´ee, S. and Thenet, G. (2016). Efficience des institutions de microfinance en bolivie et au P´erou: Une approche Data Envelopment Analysis en deux ´etapes. Finance Contrˆole Strat´egie, 1(19).
  • Cull, R., Morduch, J., et al. (2007). Financial performance and outreach: A global analysis of leading microbanks. The Economic Journal, 117(517):F107–F133.
  • Daraio, C. and Simar, L. (2007). Advanced Robust and Nonparametric Methods in Efficiency Analysis: Methodology and Applications. Springer Science & Business Media.
  • Dowla, A. and Barua, D. (2006). The Poor Always Pay Back: The Grameen II Story. Kumarian Press.
  • Emrouznejad, A., Anouze, A. L., and Thanassoulis, E. (2010). A semi-oriented radial measure for measuring the efficiency of decision making units with negative data, using DEA. European Journal of Operational Research, 200(1):297–304.
  • EQUIFAX (2015). Estudio de mercado de colocaci´on de cr´edito y acceso a financiamiento. Technical report, EQUIFAX.
  • Farrington, T. (2000). Efficiency in microfinance institutions. Microbanking Bulletin, 4(1):18–23.
  • Gutierrez-Nieto, B., Serrano-Cinca, C., and Molinero, C. M. (2007). Microfinance institutions and efficiency. Omega, 35(2):131–142.
  • Guti´errez-Nieto, B., Serrano-Cinca, C., and Molinero, C. M. (2009). Social efficiency in microfinance institutions. Journal of the Operational Research Society, 60(1):104–119.
  • Haq, M., Skully, M., and Pathan, S. (2010). Efficiency of microfinance institutions: A Data Envelopment Analysis. Asia-Pacific Financial Markets, 17(1):63–97.
  • Hermes, N. and Lensink, R. (2011). Microfinance: its impact, outreach, and sustainability. World Development, 39(6):875–881.
  • Hermes, N., Lensink, R., and Meesters, A. (2011). Outreach and efficiency of microfinance institutions. World Development, 39(6):938–948.
  • Hulme, D. and Mosley, P. (1996). Finance Against Poverty, volume 2. Psychology Press.
  • Kablan, S. (2012). Microfinance efficiency in the West African economic and monetary union: Have reforms promoted sustainability or outreach? MPRA Paper 39955.
  • Mersland, R. and Strøm, R. Ø. (2010). Microfinance mission drift? World Development, 38(1):28–36.
  • MIX (2004). Social information profile.
  • Morduch, J. (1999). The microfinance promise. Journal of Economic Literature, 37(4):1569–1614.
  • Nghiem, H., Coelli, T., and Rao, P. (2006). The efficiency of microfinance in Vietnam: Evidence from NGO schemes in the North and the Central regions. International Journal of Environmental, Cultural, Economic and Social Sustainability, 2(5):71–78
  • Piot-Lepetit, I. and Nzongang, J. (2014). Financial sustainability and poverty outreach within a network of village banks in Cameroon: A multi-DEA approach. European Journal of Operational Research, 234(1):319–330.
  • RFR (2003). Presentacion institucional red financiera rural.
  • RFR (2010-2017). Boletines microfinancieros.
  • RFR (2013). Informe 2012.
  • RFR (2014). Interview about mission and vision of Red Financiera Rural (Entrevista sobre la misi´on y visi´on de la Red Financiera Rural).
  • SALTO-USAID (2015). Microempresas y microfinanzas en Ecuador.
  • Schreiner, M. (2002). Aspects of outreach: A framework for discussion of the social benefits of microfinance. Journal of International Development, 14(5):591–603.
  • Segun, K. R. S. and Anjugam, M. (2013). Measuring the efficiency of Sub-Saharan Africa’s microfinance institutions and its drivers. Annals of Public and Cooperative Economics, 84(4):399–422. Simar, L. and Wilson, P. W. (1998). Sensitivity analysis of efficiency scores: How to bootstrap in nonparametric frontier models. Management Science, 44(1):49–61.
  • Simar, L. and Wilson, P. W. (2002). Non-parametric tests of returns to scale. European Journal of Operational Research, 139(1):115–132.
  • Simar, L. and Wilson, P. W. (2007). Estimation and inference in two-stage, semiparametric models of production processes. Journal of Econometrics, 136(1):31–64.
  • Simar, L. and Wilson, P. W. (2011). Two-stage DEA: Caveat emptor. Journal of Productivity Analysis, 36(2):205.
  • Wijesiri, M., Vigan`o, L., and Meoli, M. (2015a). Efficiency of microfinance institutions in Sri Lanka: A two-stage double bootstrap DEA approach. Economic Modelling, 47:74–83.
  • Wijesiri, M., Yaron, J., and Meoli, M. (2015b). Performance of microfinance institutions in achieving the poverty outreach and financial sustainability: When age and size matter? MPRA Paper 69821.
  • Yaron, J. (1994). What makes rural finance institutions successful? The World Bank Research Observer, 9(1):49–70.
  • Yoshida, K. and Bohn, J. (2015). tableone: Create ”Table 1” to describe baseline characteristics. R package version 0.7.
Fonte de datos: Dialnet