Measuring performance of social and non-profit Microfinance Institutions (MFIs): An application of multicriterion methodology

Abstract

Microfinance Institutions (MFIs) are special financial institutions of both social and nonprofit nature whose performance has been traditionally measured by means of financial ratios. However, performance rankings are usually based on a single criterion, so the performance measure varies according to the criterion used. This paper proposes a multicriterion methodology based on goal programming that simultaneously considers different categories involved in the performance of Microfinance Institutions. The paper is illustrated by a sample of Latin American MFIs.