A key debate in the inclusive financial services sector is whether the social mission of microfinance institutions (MFIs) conflicts with their financial goals, i.e., potential tensions in delivering simultaneously on both elements of MFIs’ double bottom line. MFI scale and scope efficiency studies to date have been uncomfortably divergent; understanding inclusive finance cost structures remains a work in progress. To that end, this article expands on earlier work in several ways: (1) implementing a less restrictive stochastic cost frontier approach; (2) including savings, not just lending, as an output in modeling MFI cost efficiency; and (3) then further expanding the range of measures included in what constitutes social impact by constructing two multidimensional social impact indexes—which we label “width of client impact” and “depth of client impact.”

Our results, leveraging time series panel data from the MIXMarket on 1400 MFIs globally, suggest MFIs achieving median levels of social impact need a (risk-adjusted) scale of about $70 million in loan portfolio to be cost efficient. That scale is more than four-fold larger than estimates using traditional loan-centric metrics, suggesting that for those MFIs operating near the efficient frontier, wider and deeper social impact are complementary rather than conflicting with larger financial scale. We also find that MFIs can achieve economies of scope cost efficiencies by jointly expanding savings services and lending services, by jointly increasing lending scale and social impact from scaling up with more clients, and by jointly increasing the number of clients served while reducing average account sizes. However, we also estimate that only about 14–28 percent of MFIs globally are operating along the cost frontier where MFIs most efficiently produce not just loans but also deliver depth of social impact for large numbers of clients.