DETERMINANTS OF TECHNOLOGICAL CHANGE IN MICROFINANCE INSTITUTIONS: A PANEL ANALYSIS

This study aims to evaluate the determinants of technological change in microfinance institutions(MFIs) to support the ongoing debate on sustainability in the microfinance industry. Hence, thelongitudinal data of 169 MFIs, covering the period from 2009 to 2014, were collected from theMicrocredit Regulatory Authority annual reports in Bangladesh. This study used the two-stage semiparametricapproach. In the first stage, the Malmquist Productivity Index (non-parametric) wasemployed to estimate the technological change. In the second stage, the regression analysis(parametric) showed that institutional characteristics, macroeconomic factors and external sources offunds significantly affect the technological change of MFIs. Findings and policy implications arefurther discussed.

Keywords:

microfinance , microfinance institutions , technological change , development , Bangladesh