An integrated framework for analysing performance indicators of Indian microfinance institutions: a multi-stakeholder perspective
Benchmarking: An International Journal
ISSN: 1463-5771
Article publication date: 9 March 2021
Issue publication date: 2 November 2021
Abstract
Purpose
An amalgamation of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytical Network Process (ANP) has been performed to develop a decision-making framework for improving the overall performance of the microfinance institutions. A primary survey was conducted to collect real-time data from the heterogeneous stakeholders of microfinance institutions across India. The validation of the proposed framework is performed by comparing the results against the conventional method of Analytical Hierarchy Process (AHP).
Design/methodology/approach
This study identifies various dimensions and indicators for measuring the performance of Indian microfinance institutions. Additionally, the ranking and prioritisation of the performance dimensions and indicators is obtained by considering the mutual interrelation between them.
Findings
The study indicates that there exists a significant dyadic relationship between financial performance and social performance for improving the overall performance of the microfinance institutions. Governance is found to unidirectionally influence both financial and social performance. Among all the considered dimensions, financial performance of a microfinance institution is the most critical dimension for improving the overall performance. The top five performance indicators of the Indian microfinance institutions are funding source, borrowing and overhead cost, size of the firm, end-use of the money and depth of outreach.
Research limitations/implications
The study was conducted in the context of Indian microfinance institutions; hence the scope of generalisation of the results is limited. This research considers both subjective and objective aspect of the performance dimensions and indicators from the perspective of multiple stakeholders (i.e. firm, society and regulator). The integrated framework is expected to aid in improving overall performance of microfinance institutions by focusing on the most critical (high prioritised) performance indicators.
Originality/value
An integrated DEMATEL-ANP framework is used in the domain of microfinance to assess the performance dimensions. This study is unique in terms of analysing performance of microfinance institutions from the perspective of heterogeneous stakeholders.
Keywords
Acknowledgements
We thank the participants/stakeholders from different MFIs for their insightful feedback and timely response to the questionnaire. The authors are also grateful to the anonymous reviewers for their constructive comments and suggestions.
Citation
Bardhan, A.K., Nag, B., Mishra, C.S. and Tarei, P.K. (2021), "An integrated framework for analysing performance indicators of Indian microfinance institutions: a multi-stakeholder perspective", Benchmarking: An International Journal, Vol. 28 No. 9, pp. 2711-2740. https://doi.org/10.1108/BIJ-09-2020-0470
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited