Refinancing and Efficiency of Microfinance Institutions in Niger
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Date
2017-05-30
Authors
Hadizatou, Ali
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
The aim of this study was to establish the effect of refinancing resources (deposits,
loans, grants) on the efficiency of 24 microfinance institutions (MFIs) in Niger over the
2005-2008 period. The study’s hypothesis was tested using a Translog function that was
estimated in the form of a system with equations of cost-sharing of inputs. The outreach
of the activities of the MFIs studied was established by using a descriptive analysis.
A Principal Components Analysis revealed that the independent MFIs had recourse to
deposits, loans, and grants more often than those affiliated to unions. Econometric results
showed that the MFIs in Niger were not efficient. But they also showed that the use of
deposits, physical capital and human capital led to a drop in the charges incurred by those
MFIs. They further showed while deposits could replace loans and grants, the latter two
could not be substituted for each other. The study also found that the social performance
of the MFIs in Niger was low, due to the fact that their service outlets were still being
set up and were located mostly in large towns. Men formed the majority of customers
targeted by the MFIs, and these granted loans mainly to customers living in urban areas.
A slowdown in the MFIs’ loan granting was observed in all the country’s regions, which
had the effect of lowering the MFIs’ costs related to economies of scale. Finally, the
study found that there was a link between MFI efficiency and social performance.
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Keywords
social performance , microfinance , , refinancing, , Niger