Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence
Abstract The topic of financial sustainability in microfinance institutions has become more important as an increasing number of Microfinance Institutions (MFIs) seek operational self-sufficiency, which translates into financial sustainability. This study aims to identify factors that drive operatio...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2021-01-01
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| Series: | International Journal of Corporate Social Responsibility |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s40991-021-00059-5 |
| _version_ | 1818970985256189952 |
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| author | Laxmi Remer Hanna Kattilakoski |
| author_facet | Laxmi Remer Hanna Kattilakoski |
| author_sort | Laxmi Remer |
| collection | DOAJ |
| description | Abstract The topic of financial sustainability in microfinance institutions has become more important as an increasing number of Microfinance Institutions (MFIs) seek operational self-sufficiency, which translates into financial sustainability. This study aims to identify factors that drive operational self-sufficiency in microfinance institutions. To accomplish this, 416 MFIs in sub-Saharan Africa are studied and several drivers for operational self-sufficiency are empirically analyzed. Results indicate that these drivers are return on assets, and the ratios total expenses/assets and financial revenues/assets. The results imply that MFIs should encourage cost-management measures. They also reveal that there may not be a significant tradeoff in self-sufficiency and outreach. These findings will enable microfinance institutions worldwide to sharpen their institutional capabilities to achieve operational self-sufficiency and also provide policymakers with more focused tools to assist industry development. |
| first_indexed | 2024-12-20T14:45:10Z |
| format | Article |
| id | doaj.art-0361247b72df462784166a435403b568 |
| institution | Directory Open Access Journal |
| issn | 2366-0066 2366-0074 |
| language | English |
| last_indexed | 2024-12-20T14:45:10Z |
| publishDate | 2021-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | International Journal of Corporate Social Responsibility |
| spelling | doaj.art-0361247b72df462784166a435403b5682022-12-21T19:37:08ZengSpringerOpenInternational Journal of Corporate Social Responsibility2366-00662366-00742021-01-016111210.1186/s40991-021-00059-5Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidenceLaxmi Remer0Hanna Kattilakoski1CBS International Business SchoolCBS International Business SchoolAbstract The topic of financial sustainability in microfinance institutions has become more important as an increasing number of Microfinance Institutions (MFIs) seek operational self-sufficiency, which translates into financial sustainability. This study aims to identify factors that drive operational self-sufficiency in microfinance institutions. To accomplish this, 416 MFIs in sub-Saharan Africa are studied and several drivers for operational self-sufficiency are empirically analyzed. Results indicate that these drivers are return on assets, and the ratios total expenses/assets and financial revenues/assets. The results imply that MFIs should encourage cost-management measures. They also reveal that there may not be a significant tradeoff in self-sufficiency and outreach. These findings will enable microfinance institutions worldwide to sharpen their institutional capabilities to achieve operational self-sufficiency and also provide policymakers with more focused tools to assist industry development.https://doi.org/10.1186/s40991-021-00059-5MFIMicrofinance institutionOperational self-sufficiencyFinancial sustainabilityOutreachFinancial inclusion |
| spellingShingle | Laxmi Remer Hanna Kattilakoski Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence International Journal of Corporate Social Responsibility MFI Microfinance institution Operational self-sufficiency Financial sustainability Outreach Financial inclusion |
| title | Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence |
| title_full | Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence |
| title_fullStr | Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence |
| title_full_unstemmed | Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence |
| title_short | Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence |
| title_sort | microfinance institutions operational self sufficiency in sub saharan africa empirical evidence |
| topic | MFI Microfinance institution Operational self-sufficiency Financial sustainability Outreach Financial inclusion |
| url | https://doi.org/10.1186/s40991-021-00059-5 |
| work_keys_str_mv | AT laxmiremer microfinanceinstitutionsoperationalselfsufficiencyinsubsaharanafricaempiricalevidence AT hannakattilakoski microfinanceinstitutionsoperationalselfsufficiencyinsubsaharanafricaempiricalevidence |