Testing Efficiency, Size, Productivity and Capital Structure of Microfinance Institutions (MFI’s) of Pakistan

The aim of the study is to test the impact of efficiency, productivity, size and profitability of microfinance institutions on capital structure in microfinance sector. For this, micro finance NGO's are selected to infer and specifically seven NGO's (e.g. Kashf, Safco, Damen, CSC, Akhuwat, Opp and Assassah) were selected.The data is obtained from annual financial statements of these organization ranging 2005-2019 (t = 15 years). For analysis, regression analysis technique is applied and unit root test is applied to check data stationary. We found role of size and efficiency significant in determining capital structure and productivity insignificant. Planning and implementation mechanism on key performance indicators (KPI's) is suggested to maximize productivity of micro finance institutions. Strategic flexibility is another important aspect to reconsider and bring into operations to enhance productivity. The results of the study will help to know that how such antecedent's affects capital structure in micro finance sector for performance concern. It will also help to understand psyche of poor borrowers in Pakistan in borrowing. This research is original for theorists, scholars and practitioners and this concept is also important for organizations to know the alarming outcomes when capital becomes adequate and entire cycle moves adversely when funding sources are very less.