TY - JOUR
T1 - Practice What You Preach: Microfinance Business Models and Operational Efficiency
AU - Bos, J.W.B.
AU - Millone, M.
PY - 2015
Y1 - 2015
N2 - The microfinance sector has room for pure for-profit microfinance institutions (MFIs), non-profit organizations, and "social" for-profit firms that aim to pursue a double bottom line. Depending on their business model, these institutions target different types of borrowers, change the size of their loans and adjust their loan pricing. We introduce a simple approach that accommodates a wide range of business models and allows us to estimate the operational efficiency of MFIs. Our empirical results show that MFIs with a high depth of outreach are most efficient, resulting in higher levels of outreach and profits for the same input mix.
AB - The microfinance sector has room for pure for-profit microfinance institutions (MFIs), non-profit organizations, and "social" for-profit firms that aim to pursue a double bottom line. Depending on their business model, these institutions target different types of borrowers, change the size of their loans and adjust their loan pricing. We introduce a simple approach that accommodates a wide range of business models and allows us to estimate the operational efficiency of MFIs. Our empirical results show that MFIs with a high depth of outreach are most efficient, resulting in higher levels of outreach and profits for the same input mix.
UR - https://www.scopus.com/pages/publications/84921473644
UR - https://www.scopus.com/inward/citedby.url?scp=84921473644&partnerID=8YFLogxK
U2 - 10.1016/j.worlddev.2014.12.018
DO - 10.1016/j.worlddev.2014.12.018
M3 - Article
SN - 0305-750X
VL - 70
SP - 28
EP - 42
JO - World Development
JF - World Development
IS - June
ER -
