\$YHUDJH3HUIRUPDQFH

**Figure 1.** Faith and secular MFIs efficiency scores representation.

#### *5.2. Second Stage Tobit Random Effect Model Regression*

The Tobit regression model is an alternative to ordinary least squares regression and is employed when the dependent variable is bounded from below or above or both with positive probability pileup at the interval ends, either by being censored or by being corner solution. The regression with random effect model (unobservable effects are uncorrelated with the observed exploratory variables) shows strong/weak significance levels, the same effect on financial efficiency is vice versa and shows negative relation. The dependent variable aggregate social efficiency (SE) shows an effect with the independent indicators to test the significance of the type of institution and region. The type of order is followed by NBFC, Bank, Microcredit, Credit corporation, and NGOs which are the five types of microfinance institutions located in three different regions, Asia, Africa, Latin America, and the Caribbean. Table 8 represents the censored regression values, how the religious status depends on the explanatory factors.


**Table 8.** Censored regression to test social efficiency as a response variable.

Legend: \* *p* < 0.05; \*\* *p* < 0.01; \*\*\* *p* < 0.001.

### **6. Discussion and Conclusions**

This study examines the cross-country efficiency analysis of 127 MFIs followed by the religious beliefs and principles from 25 countries. In the literature section, we discussed the importance of women in microfinance and the religiosity effects from the published studies. The DEA is a meta-frontier approach that gained attention in determining the efficiencies with technological gaps in time series with the decision-making units (DMUs). The DMUs are the identities of organizations (financial institutions in our case) with heterogeneous financial properties from various groups and types of institutions (Walheer 2018), here the methodology is applied for the European data in different sectors. The cross-country dual efficiency scores from the first stage results show that social performance is weaker in traditional institutions and financial performance is greater and vice versa. It is also observed that the change in selecting variables does not lead to a change in the efficiency score. This observation leads to the general suggestion that management is inefficient to maintain the outreaches accurately. The conclusion also reaches the management is well established to collect the revenues (loans, interest, profits, etc.) or the clients are more responsible with their repayment to main the health of the economy. The Tobit random effect model uses the efficiency scores (social efficiency, in Table 7) to check the effectiveness of the explanatory indicators. The religion, type of the MFI, and location are artificially created dummy variables chosen in groups to establish a relation between the explanatory factors and the efficiencies (SE). The observation is made with the change in the group, there is a change in the significance level. The main intention is to determine the faith and secular performances, and it is observed with the cross-sectional efficiency scores the financial efficiencies show positive significance level at 0.95 and 0.90 but there is no strong significance level at 0.99. If the microfinance institution is healthily maintained with both social and financial outreaches, there is a high significance to determine the religious status will have stronger significance either financially or socially.

The religious factors have positive aspects to certain limits in accessing the loans, indeed the household poor can gain in their business establishments (women). It is wellknown from the literature studies that women are more in accessing loans and good in their repayments. When it comes to traditional organizations, there are several formalities for loan assessment and therefore social outreach can damage in the rural areas where there is an absence of absolute empowerment. The financial organization has strategic moves but if there is no sufficient repayment rate in both secular/faith-based MFIs it leads to

negative financial health. Therefore, the efficiency determination should be explored by consideration of the repayment rate in MFIs in future studies.

Microfinance organizations are vanishing the barriers with digital approaches. Although we analyzed with other variables (input and output factors), the results lead to the same conclusions with efficiencies. There should be a combination of dual efficiencies along with technical efficiency which would conclude better results in minimizing the resources in religious and secular microfinance institutions.

The efficiency analysis and regression dealt with the religious, locality, and type of institution factors. There are only a few studies concentrated purely on religious institutions because the count (of religious MFIs) is small in some countries. There is a scope to analyze the performances by considering and concentrating on religious institutions irrespective of religiosity, along with the technical performance.

**Author Contributions:** A.K.K.—Data curation: Creating and organizing the variables for clear visualization, Data extracting form world bank (Mix market database), selection of variables; Formal analysis: The prior study and understanding of methodology along with study of variables and relation between them; software: Stata 13; Investigation: Study of results, troubleshoots, technical errors; Original draft preparation: Theory and literature design with sectional structures; and conceptualization: The draft concept, ordering data, research questions, tables, figures, and sections. M.M.—Conceptualization: The review, design ideas, methodologies; review and editing: The table structures, definitions, concepts, tables structure (internally); Visualization: sectional organization, study of results, rectifying error terms; Project administration: The resources with assistance; Software: Stata 13; Investigation: Study of results, troubleshoots, technical errors; Methodology: The teaching and explanation of appropriate study to conduct and perform the analysis. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Data Availability Statement:** The data was extracted from the Mix market database (world bank).

**Conflicts of Interest:** The authors declare no conflict of interests.

#### **Notes**


#### **References**

