Abstract:

The key contribution of this study was that it considered the introduction of microfinance regulatory authority as a source of improvement in micro financing practice in Bangladesh. Herein, Data Envelopment Analysis based efficiency analysis was evaluated against two spans of time; before regulation (2004, 2005 and 2006) and after regulation (2007-2010). Findings revealed slight increase in efficiency in favor of relatively small firms. Although tobit regression result did not find any evidence of direct impact of regulation on efficiency of the MFIs, but indirect influence of regulation on outreach, productivity and debt/equity ratio had been confirmed by the correlation result which were expected due to the introduction of regulation.