The Efficiency and Effectiveness of Microfinance

Despite the rapid development of the microfinance industry, many poor people still lack reliable access to financial services. One way to increase the outreach of microfinance on a sustainable basis is to improve both effectiveness and efficiency of financial service delivery. This book introduces a conceptual framework of efficiency and effectiveness analysis that describes the relationship between components of microfinance programs and the operating environment. Empirical results from the institutional and household surveys in Vietnam show that, on average, microfinance programs can reduce the input quantity by 25 per cent while maintaining the current level of outputs. The household survey revealed that access to microfinance provides insignificant contribution to the income and consumption of member households. This works provide useful insights for donors, governments, microfinance practitioners and research agencies to collaboratively make the sector become a more efficient and effective tool for poverty reduction.