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Efficiency in Microfinance Cooperatives

Iberoamerican Journal of Development Studies

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Title Efficiency in Microfinance Cooperatives
Eficiencia en cooperativas de microfinanzas
 
Creator Hartarska, Valentina; Auburn University, USA
Nadolnyak, Denis; Auburn University, USA
Shen, Xuan; Auburn University, USA
 
Subject microfinance institutions, efficiency, scale economies, social impact
instituciones de microfinanzas, eficiencia, economías de escala, impacto social
 
Description In recognition of cooperatives’ contribution to the socio-economic well-being of their participants, the United Nations has declared 2012 as the International Year of Cooperatives. Microfinance cooperatives make a large part of the microfinance industry. We study efficiency of microfinance cooperatives and provide estimates of the optimal size of such organizations. We employ the classical efficiency analysis consisting of estimating a system of equations and identify the optimal size of microfinance cooperatives in terms of their number of clients (outreach efficiency), as well as dollar value of lending and deposits (sustainability). We find that microfinance cooperatives have increasing returns to scale which means that the vast majority can lower cost if they become larger. We calculate that the optimal size is around $100 million in lending and half of that in deposits. We find less robust estimates in terms of reaching many clients with a range from 40,000 to 180,000 borrowers.


CITE AS:
Hartarska, V., Nadolnyak, D., Shen, X. (2012). Efficiency in Microfinance Cooperatives. Iberoamerican Journal of Development Studies, 1 (2): 52-75
Las Naciones Unidas han declarado 2012 como el Año Internacional de las Cooperativas, en reconocimiento a su contribución al bienestar socioeconómico. Las cooperativas tienen una participación importante en el sector microfinanciero. Estudiamos su eficiencia y proporcionamos una estimación del tamaño óptimo de dichas entidades. Utilizamos el análisis de eficiencia clásico, que consiste en estimar un sistema de ecuaciones, e identificamos el tamaño óptimo de las cooperativas microfinancieras en términos de número de clientes (eficiencia en el alcance) así como en el valor en dólares de préstamos y depósitos (sostenibilidad). Encontramos que las cooperativas microfinancieras tienen rendimientos crecientes a escala, lo que significa que en su gran mayoría pueden reducir costes si crecen. Calculamos que su tamaño óptimo está alrededor de 100 millones de dólares en préstamos y la mitad en depósitos. Encontramos estimaciones menos robustas en términos de alcance a clientes, con un rango entre 40 000 y 180 000 prestatarios.


CITAR COMO:
Hartarska, V., Nadolnyak, D., Shen, X. (2012). Efficiency in Microfinance Cooperatives. Iberoamerican Journal of Development Studies, 1 (2): 52-75
 
Publisher Universidad de Zaragoza
 
Contributor —
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Date 2012-11-06
 
Type —
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Format application/pdf
 
Identifier http://ried.unizar.es/index.php/revista/article/view/52
10.26754/ojs_ried/ijds.52
 
Source Revista iberoamericana de estudios de desarrollo = Iberoamerican journal of development studies; Vol 1, Issue 2 (2012): July - December 2012; 52-75
Revista iberoamericana de estudios de desarrollo = Iberoamerican journal of development studies; Vol 1, Issue 2 (2012): July - December 2012; 52-75
 
Language en
 
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Rights Este obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial-SinObraDerivada 4.0 Internacional.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International.