Efficiency and Performance of Microfinance Institutions: A Systematic Literature Review

Abstract

This study was conducted to find out common knowledge in the empirical literature pertaining to the performance and efficiency of microfinance institutions (MFIs), as well as the areas that require more attention for future research. The systematic literature review (SLR) technique was applied and the article selection and findings were reported according to the PRISMA guidelines. 69 empirical journal articles between 2013 and 2023 were included from Scopus database. (1) Efficiency of MFIs (Financial & Social efficiency) (2) performance of MFIs (Social & Financial Performance), (3) sustainable performance of MFIs, were identified as the three most common knowledge clusters. The review established that efficiency and conventional performance analysis of MFIs differ in methodologies and perspectives. Further, it was found that performance assessment, efficiency measurement, productivity, sustainability, and outreach of MFIs are infrequently investigated areas. Financial efficiency, social efficiency, financial performance, and social performance of MFIs were also identified as averagely investigated, creating avenues for more future studies. Thus, the study emphasized the need for further research diversifying perspectives on overall MFI performance to ensure lasting success.