The MicroBanking Bulletin Issue # 4: Focus on Efficiency

Publication Date: Feb 2000
Published by: Calmeadow
Document Type: Other (PDF)

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What are the different aspects of “efficiency” that a microfinance institution should consider?

This issue of the Micro-Banking Bulletin emphasizes that improving efficiency should be a top priority for the entire microfinance industry.

The articles include:

• WOCCU’s perspective on microfinance presented by Dave Richardson;
• “Efficient and Profitable”, by Jennifer McDonald - compares the performance of credit unions in Guatemala and Ecuador with conventional microfinance institutions (MFIs);
• “More Bang for the Buck”, by Monica Brand - identifies the historical causes for inefficiencies in MfIs;
• “Efficiency in MFIs” by Todd Farrington - describes various ways of measuring efficiency and identifies common efficiency drivers, which must be analyzed collectively to understand their impact.

The Commentary section includes:

• A question-and-answer session between William E. Gheen and Glenn Whestley about measuring unit loan costs;
• “The Problem is Cheap Donor Money”, by Malcolm Harper, discusses how MFIs do not access money from commercial banks because of the easy availability of donor money.

The Bulletin also included two case studies that show different approaches to achieving self-sufficiency:

• PADME in Benin;
• Fundusz Mikro in Poland.

In the Highlights and Tables section, the focus on efficiency is reiterated and Bob Christen analyzes the performances of participating institutions such as BancoSol, PRODEM, etc.