Determinants of Operational Efficiency of Microfinance Institutions in Bangladesh

  •  Mohd Abdur Rahman    
  •  Ahmad Rizal Mazlan    


This paper investigates the performance of operational self-sufficiency and its determinants of Microfinance Institutions (MFIs) and compared their positions in Bangladesh. The study used secondary quantitative data from the MIX market website where containing information from financial statements from the MFIs operating in Bangladesh. Toward the achievement of its objectives the study used descriptive statistical and financial ratio analysis techniques as well as econometric technique on the several performance indicators standardized by CGAP to measure of MFIs performance. The multiple regression technique used to measure the determinants of operational self-sufficiency to justify with yield on gross loan portfolio (nominal), cost per borrower, average loan balance per borrowers, age of MFIs, and number of active borrowers and operating expense ratio of MFIs in Bangladesh. The multiple regression output revealed that most of the MFIs are operational self-sufficiency to operate their operations in this region. However, study recommended for policy considerations of the successful and effective operation of microfinance programs through simplify of distribution of loan, improve yield on gross loan portfolio, personnel productivity and reduces of borrowing fund from the donors, reducing operating cost, utilize resources to generate financial revenue and focused on increase of value of their total assets in Bangladesh.

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