The Research On The Determinants Of MFIs' Financial Efficiency

Unlike traditional commercial financial institutions,MFIs provide basic f inancial services to the poor,low-income families and micro-enterprises which are excluded from the formal financial system.MFIs make a positive contribution in alleviating poverty,promoting economic growth in developing countries or rural regions in the past thirty years.In recent years,MFIs' financial ef ficiency research attracted scholars' attention with th e commercialization development trend of globa l microfinance gradually strengthening.The factors which affecting the financial efficiency of MFIs is very complex,doing deep study on this will help MFIs achieve sustainable development.I will analyze the MFIs' financial efficiency from the micro level and macro-level based on the measured financial efficiency by adopting of DEA method.Firstly,This paper adopt BBC-DEA method based on investment-oriented to measure the efficiency of 197 MFIs in 49 countries which contains China.The resear ch finds that the overall average financial efficiency of sa mple MFIs is low.Then we construct the T obit model to study the factors which affect the efficiency of MFIs.The empirical research results shows that some m icro variables have significant positive correlation with efficiency,such as assets?return on assets?Average Loan Balance/ GNI Per Capital.The Cost Per Loan and the Loan Loss Rate was negatively correlated with financial ef ficiency.Some macro environmental factors also have significant correlation with financial ef ficiency of sample MFIs which contains G DP growth level and governance environment of the sample MFIs.GDP growth rate and the effectiveness of government quality have significant correl ation with financial ef ficiency of sa mple MFIs.The regulation quality and financial ef ficiency were negative correlated.Finally,according to the em pirical results,the paper puts forward some proposals to increase the financial efficiency of t he MFIs based on th e operational level of MFIs and the level of government regulation.