Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach

Purpose: The purpose of this paper is to measure the technical efficiency and growth trajectory of Bangladeshi and Indonesian microfinance institutions (MFIs). The motivation for this study was derived from crucial roles that these institutions play in the socio-economic transformation of any nation...

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Main Authors:	Jaiyeoba, Haruna Babatunde, Adewale, Abideen Adeyemi, Ibrahim, Khairunisah
Format:	Article
Language:	English English English
Published:	Emerald Group Publishing Ltd. 2018
Subjects:	HG Finance HG4001 Financial management. Business finance. Corporation finance.
Online Access:	http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/7/56333_Measuring%20efficiencies%20of%20Bangladeshi%20and%20Indonesian%20microfinance%20institutions_SCOPUS.pdf http://irep.iium.edu.my/56333/13/56333_Measuring%20efficiencies%20of%20Bangladeshi.pdf http://irep.iium.edu.my/56333/14/56333_Measuring%20efficiencies%20of%20Bangladeshi_WOS.pdf

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spelling	iium-563332019-06-11T01:36:32Z http://irep.iium.edu.my/56333/ Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach Jaiyeoba, Haruna Babatunde Adewale, Abideen Adeyemi Ibrahim, Khairunisah HG Finance HG4001 Financial management. Business finance. Corporation finance. Purpose: The purpose of this paper is to measure the technical efficiency and growth trajectory of Bangladeshi and Indonesian microfinance institutions (MFIs). The motivation for this study was derived from crucial roles that these institutions play in the socio-economic transformation of any nations, especially Bangladesh and Indonesia which are at least prominent in the Asian context in this regard. Rather than “proving” impact, research endeavors have shifted to focusing on “improving” the impact of MFIs, because the ability to improve their impact as socio-economic transformation platform may be hinged on their efficiency over time. Design/methodology/approach: Data were obtained from MIX market database covering a five-year period from 2007 to 2011 for 20 Bangladeshi and 11 Indonesian MFIs. The data obtained were subjected to both efficiency and trajectory analysis using data envelopment analysis (DEA) based on Malmquist productivity index, independent t-test, and latent growth curve modeling (LGCM). Findings: Overall, DEA results indicate that both Bangladeshi and Indonesian MFIs are approximately efficient under constant returns to scale, variable returns to scale, and scale. There has been an improvement in the management practices of Bangladeshi MFIs, while Indonesian MFIs have increased in optimum size. Independent t-test result shows that Bangladeshi MFIs are significantly efficient in terms of performance and firm’s size compared to Indonesian MFIs, but there is no significant difference in their efficiencies with regard to technology. The intercept and the slope of the regression weight in the estimated model using LGCM are not significantly different. Research limitations/implications: This study measures technical efficiency and growth trajectory of Bangladeshi and Indonesian MFIs over a five-year period. However, future studies could explore this in greater depth by incorporating more data. Practical implications: The research findings have great implications for the Bangladeshi and Indonesian MFIs. Since this study is among the first of its kind, the researchers have paved ways for further investigation in this area. Moreover, the study encourages the Bangladeshi and Indonesian MFIs to be more concerned of their efficiencies. Originality/value: This study measures technical efficiency and growth trajectory of the Bangladeshi and Indonesian (MFIs). These have never been examined together in this way before. © 2018, Emerald Publishing Limited. Emerald Group Publishing Ltd. 2018 Article PeerReviewed application/pdf en http://irep.iium.edu.my/56333/7/56333_Measuring%20efficiencies%20of%20Bangladeshi%20and%20Indonesian%20microfinance%20institutions_SCOPUS.pdf application/pdf en http://irep.iium.edu.my/56333/13/56333_Measuring%20efficiencies%20of%20Bangladeshi.pdf application/pdf en http://irep.iium.edu.my/56333/14/56333_Measuring%20efficiencies%20of%20Bangladeshi_WOS.pdf Jaiyeoba, Haruna Babatunde and Adewale, Abideen Adeyemi and Ibrahim, Khairunisah (2018) Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach. International Journal of Bank Marketing, 36 (2). pp. 305-321. ISSN 0265-2323 https://www.emeraldinsight.com/doi/full/10.1108/IJBM-01-2017-0009 10.1108/IJBM-01-2017-0009
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English English
topic	HG Finance HG4001 Financial management. Business finance. Corporation finance.
spellingShingle	HG Finance HG4001 Financial management. Business finance. Corporation finance. Jaiyeoba, Haruna Babatunde Adewale, Abideen Adeyemi Ibrahim, Khairunisah Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
description	Purpose: The purpose of this paper is to measure the technical efficiency and growth trajectory of Bangladeshi and Indonesian microfinance institutions (MFIs). The motivation for this study was derived from crucial roles that these institutions play in the socio-economic transformation of any nations, especially Bangladesh and Indonesia which are at least prominent in the Asian context in this regard. Rather than “proving” impact, research endeavors have shifted to focusing on “improving” the impact of MFIs, because the ability to improve their impact as socio-economic transformation platform may be hinged on their efficiency over time. Design/methodology/approach: Data were obtained from MIX market database covering a five-year period from 2007 to 2011 for 20 Bangladeshi and 11 Indonesian MFIs. The data obtained were subjected to both efficiency and trajectory analysis using data envelopment analysis (DEA) based on Malmquist productivity index, independent t-test, and latent growth curve modeling (LGCM). Findings: Overall, DEA results indicate that both Bangladeshi and Indonesian MFIs are approximately efficient under constant returns to scale, variable returns to scale, and scale. There has been an improvement in the management practices of Bangladeshi MFIs, while Indonesian MFIs have increased in optimum size. Independent t-test result shows that Bangladeshi MFIs are significantly efficient in terms of performance and firm’s size compared to Indonesian MFIs, but there is no significant difference in their efficiencies with regard to technology. The intercept and the slope of the regression weight in the estimated model using LGCM are not significantly different. Research limitations/implications: This study measures technical efficiency and growth trajectory of Bangladeshi and Indonesian MFIs over a five-year period. However, future studies could explore this in greater depth by incorporating more data. Practical implications: The research findings have great implications for the Bangladeshi and Indonesian MFIs. Since this study is among the first of its kind, the researchers have paved ways for further investigation in this area. Moreover, the study encourages the Bangladeshi and Indonesian MFIs to be more concerned of their efficiencies. Originality/value: This study measures technical efficiency and growth trajectory of the Bangladeshi and Indonesian (MFIs). These have never been examined together in this way before. © 2018, Emerald Publishing Limited.
format	Article
author	Jaiyeoba, Haruna Babatunde Adewale, Abideen Adeyemi Ibrahim, Khairunisah
author_facet	Jaiyeoba, Haruna Babatunde Adewale, Abideen Adeyemi Ibrahim, Khairunisah
author_sort	Jaiyeoba, Haruna Babatunde
title	Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
title_short	Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
title_full	Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
title_fullStr	Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
title_full_unstemmed	Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach
title_sort	measuring efficiencies of bangladeshi and indonesian microfinance institutions: a data envelopment analysis and latent growth curve modeling approach
publisher	Emerald Group Publishing Ltd.
publishDate	2018
url	http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/ http://irep.iium.edu.my/56333/7/56333_Measuring%20efficiencies%20of%20Bangladeshi%20and%20Indonesian%20microfinance%20institutions_SCOPUS.pdf http://irep.iium.edu.my/56333/13/56333_Measuring%20efficiencies%20of%20Bangladeshi.pdf http://irep.iium.edu.my/56333/14/56333_Measuring%20efficiencies%20of%20Bangladeshi_WOS.pdf
first_indexed	2023-09-18T21:19:27Z
last_indexed	2023-09-18T21:19:27Z
_version_	1777411783670104064

Measuring efficiencies of Bangladeshi and Indonesian microfinance institutions: A data envelopment analysis and latent growth curve modeling approach

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