Performance Analysis of Microfinance Institutions in Ethiopia
Journal Title: International Journal of Business and Management Invention - Year 2018, Vol 7, Issue 4
Abstract
The objective of this study was to assess the performance of MFI in Ethiopia. Thirty-one MFIs operating in Ethiopia had been selected for performance assessment. To analyze outreach, collection performance, financial sustainability, efficiency and welfare impact indicators were used. Peer category was considered as an important factor and classified MFIs into three categories based on maturity, breadth outreach, and operation scale. The Ethiopian MFIs is growing fast in terms of financial sustainability and outreach but there are millions of people that are in need of financial service. This study specifies how the Ethiopian MFIs stands in terms of outreach and financial sustainability. A financial ratio such RoA, RoE, FSS, OSS and many more related and descriptive statistics were used for the study to know how they are performing their operation. The results of the study show that performance of MFIs are poor in terms of depth outreach as they are not reaching many poor people living under the poverty line. Their performance needs to be improved as they were not covering their financial breakeven to mean that some of the MFIs in Ethiopia cannot cover their operating expense, but are good in terms of breadth outreach.
Authors and Affiliations
Abdi Ahmed Hasan, Dr. G. S. Batra
Keywords
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