Impact of operational efficiency and innovative business processes on the financial performance of MFIs
by Ambu Sharma; Rajesh Kumar
International Journal of Technoentrepreneurship (IJTE), Vol. 5, No. 1, 2024

Abstract: This study aims to examine the impact of operational efficiency and innovative business processes on the financial performance of microfinance institutions (MFIs). Recently, numerous MFIs have ceased operations due to ineffective operational processes and cautious business practices. Therefore, the study gathered empirical data from 421 executives of MFIs through purposive sampling. The survey was conducted between January 2023 and September 2023 using adopted and modified scales. The findings indicate that the solvency position, learning and growth, and lending methodology play a significant role in determining the operational efficiency of MFIs. Additionally, social performance, innovative business approaches, and operational efficiency positively impact the financial performance of MFIs. Theoretically, this study contributes by expanding the dimensions of operational efficiency in MFIs and introducing social performance and innovative business approaches to enhance their financial performance. The mediating effects of social performance and innovative business processes are positive and significant.

Online publication date: Fri, 22-Mar-2024

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