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Is there a trade-off between MFls' financial efficiency and outreach in macroeconomic and institutional context?

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  • Xu, Shufang
  • Zhu, Ning
  • Copestake, James
  • Cai, Guiming
  • Peng, Xinman

Abstract

This paper analyses whether there is a trade-off between microfinance institutions (MFIs)' financial efficiency and outreach in macroeconomic and institutional context. We first theoretically discuss the potential impacts of macroeconomic and institutional factors on financial efficiency of MFIs, then present empirical evidence in support of theoretical analysis. The main results show that there is a potential trade-off between MFIs' financial efficiency and outreach when we consider the influences of macroeconomic and institutional variables on financial efficiency of MFIs.

Suggested Citation

  • Xu, Shufang & Zhu, Ning & Copestake, James & Cai, Guiming & Peng, Xinman, 2024. "Is there a trade-off between MFls' financial efficiency and outreach in macroeconomic and institutional context?," International Review of Economics & Finance, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:reveco:v:94:y:2024:i:c:s1059056024003952
    DOI: 10.1016/j.iref.2024.103403
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    More about this item

    Keywords

    MFIs' financial efficiency; Outreach; Multi-directional efficiency analysis; Macroeconomic condition; Institutional context;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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