The two reasons are: 

(i) Some effort is used (or wasted) in overcoming friction between the string and the grooves of the pulleys. 

(ii) Some effort is used up (wasted) in lifting up the movable block alongwith the load. 

On account of the above two reasons, effort applied is always more than the load lifted up and so the M.A. is always less then 1. Hence efficiency is always less than 100%.