Outreach and Performance of Microfinance Institutions in Sub-Saharan Africa
Keywords:
MFIs, Outreach, Profitability, Microfinance schism, Internal and external determinants, Sub-Saharan AfricaAbstract
Microfinance institutions is a form of financial institution that provides financial service to the poor individuals, jobless or peoples who can’t obtain financial services from traditional banks. Most MFIs are suffering to balance being profitable in order to be self sustain and outreaching great number of poor people. This study aims to investigate the internal and external determinants that influence the outreach and financial performance of MFIs in sub-Saharan Africa (SSA). A quantitative research was employed using secondary data which was collected from MIX market and World Bank. In addition, the data was gathered from 43 MFIs and the determination of the MFIs that participate in the sample was dependent on the fulfillment of the data for five period of time between 2013 and 2017. The panel data was analyzed quantitatively using EViews software. The outcome in this examination is that size of MFIs is the major determinants that impacts both social and financial performance of MFIs. However, GDP growth is insignificant factor on both outreach and financial performance. The study recognizes factors contributing to the success of MFIs as well as conveys significant information to the stakeholders of MFIs.
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