Potential for Cost-Reducing and Efficiency Increasing Measures in Financial Institutions

By placing operational efficiency high on the agenda of microfinance and keeping it at high levels in good as well as in bad times, the microfinance community could make significant progress on achieving its goal of ensuring access to affordable finance for all. Having this in mind, this study has attempted to take a broader view of the landscape of operational efficiency improvement for microfinance with a particular focus on credit processes.

Through conducting case studies of six financial institutions, and referencing efficiency-related works published by others, this report identifies a broad range of measures that can be undertaken by microfinance providers to improve the efficiency of their operations. The six commercial banks selected vary strongly in terms of size, institutional history and operating environment, and so illuminate efficiency challenges across a broad spectrum of institutional cultures, maturity stages, and national contexts.