Journal Press India^®

Author Details ( * ) denotes Corresponding author

A strong presence of the Microfinance sector has been felt in many developing economies of the world. Thus, the objective of this paper is to analyze and cross-compare the performance of the industry in six South Asian countries namely Bangladesh, India, Pakistan, Afghanistan, Nepal and Sri Lanka which are graphically near to each other. To evaluate the performance of these countries, Fixed Effects Panel Data Estimations in E-views has been used. A significant difference in performance has been witnessed on all 14 parameters of performance. Extensive manual calculations have been done to cross compare and rank the countries based on the selected parameters. Bangladesh bags the first position closely followed by India while Afghanistan ranks last. A theoretical framework has been developed to understand and analyze the reasons for the difference in the performance of the six countries.

Keywords

Microfinance; India; Bangladesh; Afghanistan; Pakistan; Nepal; Sri Lanka; Microfinance information exchange (MIX)

1. Achimba, A. E. (2018). The effect of gross loan portfolio management practices on performance of deposit taking micro finance institutions in Kenya : A survey of deposit taking micro finance institutions in Uasin Gishu County, Kenya. International Journal of Economics, Commerce and Management, VI(12), 150–168.
2. Blaine, S., Hind, T., Mohsin, A. S., Sa-Dhan., Prahlad, M., Indrajith, W., & Anura, A. (2006). Performance and transparency: a survey of microfinance in South Asia. Washington, DC: World Bank. Retrieved from http://documents.worldbank.org/curated
3. /en/717091468303045036/Performance-and-transparency-a-survey-of-microfinance-in-South-Asia.
4. Churchill, S. A., Danso, J. K., & Nyatefe, E. (2018). Microfinance institution performance: Does the macroeconomy matter? Economic Papers, 37(4), 429–442. Retrieved from https://www.onlinelibrary.wiley.com/doi/10.1111/1759-3441.12233.
5. Cull, R., Demirgüç-kunt, A., & Morduch, J. (2007). Financial performance and outreach: A global analysis of leading microbanks. Economic Journal, 117(517), 1-49.
6. Cull, R., Navajas, S., Nishida, I., & Zeiler, R. (2015). A new index of the business environment for microfinance. World Development, 70(September), 357–388.
7. Daher, L., & Saout, E. L. (2014). Modeling the profitability of microfinance institutions: An application of the dynamic panel data methodology, (April), 1–20. Retrieved from https://www.researchgate.net/publication/274034315_Modeling_the_profitability_of_microfinance_institutions_An_application_of_the_dynamic_panel_data_methodology
8. Fernando, N. A. (2004). Microfinance industry in Asia : Current status, recent trends and some thoughts on the future, 1–13. Retrieved from http://www.arabic.microfinancegateway.org/sites/default/files/mfg-en-paper-microfinance-industry-in-asia-current-status-recent-trends-and-some-thoughts-on-the-future-2000.pdf.
9. Ferro-Luzzi, G., & Weber, S. (2006). Measuring the performance of microfinance institutions. Retrieved from http://ssrn.com/abstract=918750.
10. Gant, R., De Silva, D., Atapattu, A., & Durrant, S. (2002). National microfinance study of Sri Lanka: Survey of practices and policies, 1-299. Retrieved from http://www.microfinancegateway.org/sites/default/files/mfg-en-paper-national-microfinance-study-of-sri-lanka-survey-of-practices-and-policies-2002.pdf
11. Gupta, P. S. V., Chawla, P. P. M., & Harkawat, P. S. (2012). Measuring performance of microfinance institutions in India. Annamalai International Journal of Business Studies & Research, 4(1), 14–23.
12. Imai, K. S., Gaiha, R., Thapa, G., Annim, S. K., & Gupta, A. (2012.). Performance of microfinance institutions - A macroeconomic and institutional perspective. Retrieved from https://core.ac.uk/display/6382036.
13. Kioko, C., Kingori, S., & Shikumo, D. H. (2017). Determinants of financial performance of micro-finance banks in Kenya. Research Journal of Finance and Accounting, 8(16), 1–8.
14. Mersland, R., & Strøm, R. Ø. (2009). Performance and governance in microfinance institutions. Journal of Banking and Finance, 33(4), 662–669.
15. Micro Finance Institution Network. (2017). Microfinance in Asia A mosaic future outlook Contents. Microfinance Institution Network, 1-31. Retrieved from https://www.pwc.in/assets/pdfs/publications/2017/microfinance-in-asia-a-mosaic-future-outlook.pdf.
16. MicroRate, & Inter-American Development Bank (2003). Performance indicators for microfinance institutions. Retrieved from https://www.microfinancegateway.org/sites/
17. default/files/mfg-en-toolkit-performance-indicators-for-microfinance-institutions-technical-guide-3rd-edition-2003.pdf.
18. MicroView Report (2019). Retrieved from http://ama.org.af/wp-content/uploads/2017/
19. 07/MicroView-Report-22.pdf.
20. MIX Global 100: Ranking of microfinance institutions (2009). Retrieved from http://indiamicrofinance.com/wp-content/uploads/2010/08/2009-MIX-Global-100-Composite.pdf.
21. Mohammad, S. (2010). Micrfinance challenges and opportunities in Pakistan. European Journal of Social Sciences, 14(1), 88–97.
22. Narwal, K. P., & Yadav, M. K. (2014).Impact of Characteristics on Outreach and Profitability of Microfinance Institution in India., International Journal of Financial Management, 4(3), 50-59.
23. Prospects for investment in South Asian microfinance (2010). Retrieved from http://www.microfinancegateway.org/sites/default/files/mfg-en-paper-prospects-for-investment-in-south-asian-microfinance-2010.pdf.
24. Rai, A. (2011). A comparative analysis of the financial performance of microfinance institutions of India and Bangladesh. Jaypee Business School. Retrieved from http://docshare04.docshare.tips/files/23887/238871146.pdf
25. Rai, A. (2015). Indian microfinance institutions: Performance of young and old institutions. Vision: The Journal of Business Perspective, 19(3), 189–199.
26. Richard, K., Segun, S., & Anjugam, M. (2013). Measuring the efficiency of sub-saharan Africa’s microfinance institutions and its drivers. Annals of Public and Cooperative Economics, 84(4), 399–422.
27. Rupa, R. (2017). Financial performance of MFIs in India and Bangladesh. Researcher’s World: Journal of Arts, Science & Commerce, VIII(March), 60–76.
28. Rupa, R. (2017). Is age a criterion for sustenance of microfinance institutions? A comparative study of India and Bangladesh. MUDRA: Journal of Finance and Accounting, 4(1), 86-101.
29. Sethi, K., Nasreen, R., & Khan, M. (2017). Performance evaluation of selected microfinance institutions operating in New Delhi, India. Asia Pacific Journal of Advanced Business and Social Studies, 4(1), 201–213.
30. Sethi, K., Nasreen, R., & Khan, M. (2018). Micro finance industry: A review analysis. Pranjana: The Journal of Management Awareness, 20(2), 59.
31. Shrestha, S. M. (2009). State of microfinance in Nepal - rmdcnepal.com. Retrieved from http://www.rmdcnepal.com/uploads/financials/State of Microfinance in Nepal.pdf.
32. South Asia. (2019). World bank report. Retrieved from https://www.worldbank.org/en/region/sar.
33. Srinivasan, N. (2011, September 15). Microfinance India - State of the sector report 2010-PDF. Retrieved from https://indiamicrofinance.com/microfinance-india-state-sector-report-2010-pdf.html.
34. State of Microfinance in Pakistan. (2004.). Retrieved from http://inm.org.bd/wp-content/uploads/2015/09/Pakistan.pdf.