Ownership and technical efficiency of microfinance institutions: Empirical evidence from Latin America

By using stochastic frontier analysis, this article examines the technical efficiency of different types of microfinance institutions in Latin America. In particular, it tests whether differences in technical efficiency, both intra- and interfirm, can be explained by differences in ownership. With a focus on non-governmental organizations, cooperatives and credit unions, non-bank financial intermediaries, and banks, the data set contains 1681 observations from a panel of 315 institutions operating in 18 Latin American countries. The results show that non-governmental organizations and cooperatives have much lower interfirm and intrafirm technical efficiencies than non-bank financial intermediaries and banks, which indicates the importance of ownership type for technical efficiency.     

Do Savings and Credit Institutions Reduce Vulnerability? New Evidence From Mexico

This study examines whether membership in a savings and credit society (SACP) reduces vulnerability to poverty, using a representative survey from the National Savings and Financial Services Bank. The sample of households includes those that are and are not members of a SACP during 2004?2007. This evidence indicates that membership improves income; furthermore, membership decreases the variance in annual household per capita income. Both effects reduce the probability that somebody becomes poor. Finally, the results offer support for the proposition that households that join a SACP have better abilities to smooth consumption in the face of adverse shocks, and thus are less susceptible to shocks, than do households that are not members.