Microfinance institutions in Côte d'Ivoire between arbitration and convergence of social and financial performance: An empirical study using the Data Envelopment Analysis (DEA) method

Abstract

The disappearance of some microfinance institutions (MFIs) in Côte d'Ivoire, and the departure of others from their original mission, has led to a reflection on the relationship between social and financial performance. Thus, the objective of this paper is to examine the degree of importance between the social and financial performance of MFIs in Côte d'Ivoire. The data for this study was collected at the General Directorate of Microfinance over the period 2013-2021 and concerns nineteen (19) MFIs. After estimating the efficiency scores using the Data Envelopment Analysis (DEA) method, the results obtained were then used to carry out correlation tests and simple linear model regressions.

In total, over the period 2013-2021, the results show that MFIs are technically inefficient with scores of 0.84 and 0.34 respectively for social performance and financial performance, under the variable returns to scale (VRS) hypothesis. Secondly, the results show the existence of a positive but weak correlation between social and financial performance (cor = 0.38). Finally, our results indicate that there is a positive and statistically significant linear relationship between financial and social performance scores. This could mean that MFIs, in their operations, aim not only for financial profitability but also for the fight against poverty among the disadvantaged. However, it would be desirable to put in place good institutional and human capacities and rigorous and transparent management methods in order to achieve these two types of performance. 

Keywords: Financial performance, Social performance, DEA method, Correlation

JEL Classification: C15, G21, 016

Paper type: Empirical research