Efficiency of Faith and Secular Based Microfinance Institutions

Abstract

This paper represents numerical illustration with real data from three major continental regions Asia, Africa, and South America (Latin America & Caribbean). The financial and social data was obtained legally for each institution from the above regions and the aim is to examine the efficiencies with intermediate approach non-parametric two-stage data envelopment analysis (DEA) is implemented followed by Tobit regression random effect model. Here the faith and secular firms were identified and filtered later through smoothed homogeneous bootstrapped procedure the efficiencies are estimated with suitable inputs and outputs. The principles of respective religions are provided to show the differences. The efficiency of each financial institution is different socially and financially according to the geographical locations. The regression results are obtained by the censored model from a minimum value to the maximum value of the dependent variable.