Efficiency
Date:
May 2007
There are many common measures for efficiency, either looking at cost per unit such as cost per borrower or cost per loan, or looking at cost per dollar lent: operating expenses over loan portfolio, personnel expenses over loan portfolio or over total administrative expenses. Often times, one of these measures is taken in isolation to identify whether or not an MFI is ‘efficient’. But is this sufficient?
Although these measures alone shed light on whether a microfinance institution (MFI) is able to provide its services to clients with lower costs, they do not take into account certain important factors, such as whether the MFI offers multiple products (which may increase delivery costs), is benefiting from read more…
