Document Type : Research Article



Microfinance sector showed a tremendous growth for the last decade and got a considerable
attention throughout the entire world specifically in the developing countries, but on the other
side the number of poor people has not been decreased. The focus of this study is to investigate
the social efficiency of microfinance providers and to examine the different factors or problems
that affecting the social efficiency of microfinance providers. Social efficiency means to how
efficientlytransfer the products and services of the MFPs to the society with minimum cost. Data
Envelopment Analysis approach has been proposed for the measurement of social efficiency
with the total assets, total number of staff, operational expenditure as input while Average loan
balance/ borrower/GNIpc. Number of female borrowers and indicator of benefit to the poorest as
output variables. Regression analysis is proposed to find out the impact of different factors on the
social efficiency of microfinance providers. Factors affecting the social efficiency of
microfinance providers includes the presence of aggressive marketing, focus on profit oriented
programs, commercialization, high level of competition, entrepreneurial behaviors of the people,
different cultural dimensions, high interest rates, political instability, growth addiction, focus on
stability or short term profitability, focus on loan repayment, lack of follow-up programs, lack of
awareness, miss use of loan, fear of defaults, lack of technical support etc. which have to be
considered in future studies.