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Table 1 Definition of variables in the empirical analysis

From: Competition and microfinance institutions’ performance: evidence from India

Variables Definitions and measurements Authors that use the variables
Social performance measures
 Depth of Outreach Average outstanding loan (Gross loan portfolio to Active number of clients) as a percentage of per capita Gross National Income (GNI); measures how deeply MFIs reach poor clients Rosenberg et al., 2009
 Breadth of Outreach The logarithm of the number of active clients served: measures how MFIs expanding financial services to its clients Rosenberg et al., 2009
Financial performance measures
 Return on Asset (ROA) Computes by dividing net operating income by average assets; measures MFIs’ ability to utilize resources profitably Rosenberg et al., 2009
 Operational Self Sufficiency (OSS) Obtains by dividing operating income by total expenses; measures the MFIs’ ability to cover all expenses by income generated from operational activities. Rosenberg et al., 2009
Competition measures
 Boone indicator A proxy for competition; the value of β (β2Xjt) in Eq. 5; large negative β indicates a higher competition level Boone (2008)
 Output Measured by gross loan portfolio Assefa et al., 2013; Hermes et al. (2011); Van Leuvensteijn et al. (2011)
 cost of labor The ratio of personnel expenses to total assets Kar, 2016; Van Leuvensteijn et al. (2011)
 cost of fund The ratio of financial expenses to total liabilities Kar, 2016; Van Leuvensteijn et al. (2011)
 cost of physical capital The ratio of administrative expenses to total assets Kar, 2016; Van Leuvensteijn et al. (2011)
Control variables
 MFI_age Service year Assefa et al., 2013; Cull et al., 2009; Hermes et al. 2011
 MFI_size Log of total assets Assefa et al., 2013; Cull et al., 2009; Hermes et al. 2011
 MFI_owndum Dummy variable to capture the effect of ownership status (1 for NBFI, 0 otherwise) Mersland and Strøm (2010)
 Risk level Total equity to total assets ratio Cull et al., 2009