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Total Factor Productivity of Indian Microfinance Institutions

Author

Listed:
  • Bibek Ray Chaudhuri

    (Indian Institute of Foreign Trade, Kolkata, India)

  • Shubhasree Bhadra

    (Department of Business Management, University of Calcutta)

Abstract

The present study attempts to empirically examine the total factor productivity change (TFPG) of Indian microfinance institutions, using balanced panel data set of 55 MFIs in India between 2008 and 2010. A non parametric Malmquist Productivity Index has been used for this purpose. Efficiency of Indian MFIs has been calculated based on production approach. It was found that technological change has played a significant role in increase of TFPG in the terminal year considered. Further, significant change of scale efficiency in terms of women borrowers also enhances TFPG. Moreover, it was found that operational self sufficiency, return on asset and lagged capital-asset ratio, are significant determinants of TFPG. PAR>30 was also found to be positively related to TFPG.

Suggested Citation

  • Bibek Ray Chaudhuri & Shubhasree Bhadra, 2015. "Total Factor Productivity of Indian Microfinance Institutions," Working Papers 1527, Indian Institute of Foreign Trade.
    • Handle: RePEc:ift:wpaper:1527
    as

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    References listed on IDEAS

    as
    1. Piyu Yue, 1992. "Data envelopment analysis and commercial bank performance: a primer with applications to Missouri banks," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 31-45.
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    More about this item

    Keywords

    Productivity change; efficiency; microfinance institution; index number;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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