The Efficiency of Microfinance Institutions in Albania

Abstract

Microfinance refers to small financial services mostly loans and savings which are provided to farmers, micro or small enterprises, that produce, improve revenues from the rent of machines, equipment and other basic financial like insurance to poor people and other groups at local levels in urban and rural areas on developing counties. Currently the microfinance in Albania is a significant factor which should be taken into consideration and such is analyzed throughout the element of this thesis. This study analyzes the microfinance institutions efficiency in Albania from years 2002 to 2012. Furthermore, will be used Data Envelopment Analysis method (DEA) for assessing technical efficiency, the input-oriented and output-oriented model. According to this topic, there are limited studies in the efficiency of microfinance institutions (MFIs) in Albania meaning that the study on efficiency in this region is important and will contribute to the actual literatures. The aim of this study is to examine the efficiency levels of five MFIs in Albania. The MFIs that will be analyzed are: Besa fund, ASC-Albania, ProCredit Bank, FAF-DC and NOA. There will be investigating the efficiency performance and their help in poverty reduction. Moreover, result indicates an efficient measure for these MFIs as all of them have their score efficiency 1 except NOA in year 2008.