Intellectual capital components in Indian microfinance sector: scale development and an empirical study

The purpose of this paper is to develop a scale to analyse different components and sub-components of intellectual capital (IC) with special reference to microfinance sector. The data has taken from 252 microfinance institutions (MFIs) providing microfinance service irrespective of their legal status. Exploratory factor analysis and confirmatory analysis used to develop the scale. This supports the classification given by many researchers and confirms the three dimensions of IC are human capital, structural capital and relational capital. But the sub-dimensions seems to be are industry specific with 36 items with nine factors being extracted. The nine sub-dimensions or factors includes client related competencies, decision-making competencies, value driven competencies, processual competencies, infrastructural competencies, MFI-client relationship, MFI-stakeholder relationship, client feedback, and stakeholder dignity. The proposed metrics are a useful benchmarking tool for microfinance practitioners, managers to use to monitor and improve their organisational intellectual capital.