Are Microfinance Institutions Socially Efficient in Achieving the Sustainable Development Goal of Poverty Alleviation? Evidence From India

ABSTRACT Poverty has become an obstinate and complex challenge in India. The present study evaluates the social efficiency of 31 Indian MFIs from 2011 to 2018. This research studies how regional and legal status impact results associated to SDG 1. This article applies two‐stage Data Envelopment Analysis (DEA), Malmquist Productivity Index (MPI), and Tobit Regression. We have implemented significant social indicators average loan balance per borrower and active borrowers to assess the social efficiency of the MFIs. The DEA and MPI outcomes specify vital development in social efficiency across most of the MFIs. The Tobit regression results designate a positive relationship between social efficiency and the dependent variables across the regions. This highlights the prospective for policymakers to adopt miscellaneous approaches to boost MFIs' efficiency in serving poor and disregarded societies.