Abstract
This study scrutinizes the developments and main determinants of microfinance institutions’ efficiency in the South Asian region during the period of financial crisis for the year 2008 and 2009. The Data Envelopment Analysis (DEA) methodology is used to obtain efficiency estimates and afterwards a Tobit model is run to uncover its main determinants. The first result signifies that the South Asian microfinance institutions experienced average inefficiencies of 20.15% and 12.2% and for Technical Efficiency (TE), and Pure Technical Efficiency (PTE) respectively for the period of study. Furthermore, the main determinants of increased microfinance institutions’ efficiency are borrower per staff, maturity of microfinance institution, small loan portfolio and write off ratio; on the other hand, other financial services, individual lending methodology and the nature of institutions in being non-bank financial intermediary reduce the efficiency.