Efficiency in microfinance: financial and social performance of agricultural credit cooperatives in Bulgaria

Efficiency in microfinance requires accounting for a specific ambiguous production goal. Beyond financial performance, microfinance institutions are to be assessed with regard to their social impact. Based on a comprehensive data collection campaign on 15 Bulgarian agricultural credit cooperatives (ACCs), we compiled a database uniting financial (perennial data from 2000 to 2009) and social performance indicators (2009). The social performance assessment follows an internationally renowned methodology of social auditing. It provides the database for the construction of a social output, which, apart from outreach, evaluates social network quality, client benefits (protection from over-indebtedness) and other items that have not been assessed in efficiency analysis before. We develop a new analytical model for Data Envelopment Analysis and gain meaningful results for the sample of ACCs. Interestingly, the efficiency rankings revealed that only ACCs with sound financial performance can achieve a higher ranking in the specification including the social output.