Analysis of the Cost-Efficiency of Microfinance Institutions in the West African Economic Monetary Union Area
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Date
2016-09-30
Authors
Togba, Leadaut Edith Prisca
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
The cost-efficiency of microfinance institutions (MFIs) has emerged as an issue crucial
to their survival and the continuity of their services. The present study uses the stochastic
frontier method to analyse the levels and determinants of cost-efficiency of a sample
of microfinance institutions operating from the West African Economic and Monetary
Union (WAEMU) area. For the 2000–2008 period, these MFIs were found to have
functioned in an ineffective way in terms of minimizing their costs. Factors influencing
cost-efficiency include the age and type of MFI. The study’s results also reveal that the
number of female borrowers, the MFI’s financial performance, level of capitalization,
geographical location, and size were explanatory factors for the cost-efficiency of the
MFIs studied.
Description
Keywords
Stochastic frontier