Purpose The purpose of this paper is to provide preliminary efficiency assessment of Arab microfinance institutions (MFIs) within the period 2002–2012. Microfinance is defined as the provision of financial services to poor and low-income households and their microenterprises on a sustainable basis. Design/methodology/approach The authors first present the main features of microfinance in the Middle East and North Africa (MENA) region. Second, based on a simple of 72 microfinance institutions issued from ten countries of the region, they develop a bootstrap–data envelopment analysis (bootstrap–DEA) framework to measure Arab MFIs’ efficiency. Finally, they apply parametric and non-parametric tests to compare the performance and identify factors that contribute to the efficiency of Arab Islamic microfinance institutions. Findings Efficiency scores of the MENA region exhibit high variability, both across time and countries. Significant difference in efficiency was found due to MFI age or regulation. Results also reveal the ability of Arab MFIs to combine social and financial performance and their solidity in time of crisis. Originality/value In this paper, the authors apply DEA–bootstrap method on a large sample of Arab MFI with special look at the peer group differences. Unlike most previous relevant studies, the paper overcomes many of the drawbacks of the DEA method by using, in addition to the DEA–bootstrap approach, a test of return to scale and a combination of three procedures to detect outliers. Furthermore, this paper analyses the efficiency of MFI in the MENA region in the light of financial crises and Arab Spring.

Purpose The aim of this study is to investigate the effect of income and geographic diversification on the double bottom line of microfinance institutions (MFIs) in Middle East and North Africa (MENA) countries where conventional and Islamic MFIs coexist. The idea is to explore whether diversification impacts MFIs' financial performance and outreach differ for Islamic microfinance. Design/methodology/approach The authors test the effect of diversification and business models of MFIs on their performance and poverty outreach. The authors’ data set is an unbalanced panel sample of 81 (Islamic and conventional) MFIs in MENA countries covering 1999–2018, comprising 743 MFI-year observations. Findings The authors find that increasing income diversification in microfinance and focusing on rural areas decreases the financial performance of MFIs in MENA countries. Islamic MFIs benefit from income diversification by increasing their financial performance. The results provide evidence of a nonlinear relationship between income diversification and the financial performance of MFIs. Although conventional MFIs improve their depth of outreach by diversifying their income, Islamic MFIs have a lower breadth of outreach because they show a higher degree of income diversification. Practical implications This research contributes to the ongoing debate of whether MFIs should focus on or diversify their services to Islamic microfinance. Therefore, the findings of this study are practically crucial for MFIs' stakeholders to understand the contribution of diversification strategies in improving the Islamic MFIs to achieve both financial and social objectives. Originality/value To the best of the authors’ knowledge, it is the first research that addresses the impact of diversification strategies in Islamic microfinance. Additionally, using a panel data set of conventional and Islamic MFIs in MENA countries spanning 1999–2018, this study provides empirical evidence on the diversification versus focus issue from the microfinance industry and the subset of Islamic microfinance.

This study employs the Panzar-Rosse H-statistic to assess the competitive conditions of the Tunisian banking industry over the period 1999 to 2003. The results show that the banking market is in long-run equilibrium and the Panzar-Rosse H-statistic indicates that the Tunisian banking market is operating under conditions of monopoly. It seems therefore that the liberalization process and the reforms implemented since 1987 to the banking sector could not compensate, for the period under study, the existence of market power in this sector. Competitive Conditions of the Tunisian Banking Industry533 2006. Moreover, for all North African countries included in the sample (Tunisia, Algeria and Morocco), the tests of hypothesis failed to reject a monopolistic environment in the banking industry (Turk-Ariss, 2009).By estimating the effect of prices of production factors on net income, one could conclude that movements of liberalization, deregulation and modernization of the Tunisian banking system could not compensate, for the period under study, the existence of market power. This market power may be related to: 1. A low presence of foreign banks on the Tunisian banking industry. 2. The importance of economic barriers and other important sources of market power.

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