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 | |
cost of fund | The ratio of financial expenses to total liabilities | |
cost of physical capital | The ratio of administrative expenses to total assets | |
Control variables | ||
MFI_age | Service year | |
MFI_size | Log of total assets | |
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 |