Key Issues in Assessing the Performance of Microfinance Institutions

The microfinance revolution and the tremendous growth of the industry have drawn attention to performance assessment of microfinance providers, the operations of which are often supported by substantial public funds. in this paper we discuss five related issues: a) the search for an adequate measure of financial sustainability, b) the trade-off between outreach and sustainability, c) the question of how to determine the opportunity cost of concessionary borrowings, d) the conceptual framework of performance assessment, and e) the integration of saving services into performance assessment and subsidy dependence measures.