DefinePK

Abstract

This research evaluates the efficiency of 22 microfinance institutions (MFIs) in Pakistan from 2009 to 2018, analyzing 220 decision-making units (DMUs) through Data Envelopment Analysis (DEA). The study uses three inputs—Total Assets, Operating Expenses, and Number of Personnel—and three outputs: Gross Loan Portfolio, Active Borrowers, and Active Female Borrowers. Results indicate signifi- cant efficiency variations, with Akhuwat leading at 0.95, followed by ASA Pakistan (0.92) and Damen Support (0.89), while FFO (0.67) and Apna Microfinance Bank (0.68) rank lowest. Top performers show improved efficiency over time, driven by cost-effective operations and innovative models. The analysis of female borrower ratios reveals no consistent correlation with efficiency, suggesting a trade-off be- tween social outreach and financial performance. These findings provide actionable insights for MFI managers to optimize resource allocation and enhance outreach, contributing to Pakistan’s financial inclusion objectives. The study underscores the importance of efficiency in balancing dual MFI goals and lays a foundation for future research into sustainable microfinance practices in Pakistan’s evolving economic landscape.