AN ASSESSEMANT OF SOCIAL AND FINANCIAL PERFORMANCE DETERMINANTS: LESSONS FROM SELECTED ETHIOPIAN MICRO FINANCE INSTITUTIONS (MFIs)

Abstract

The overall objective of this study was to analyze determinants of Micro Finance Institutions performance in Ethiopia and evaluate their social performance. The study adopted an explanatory and descriptive qualitative research design. Samples were taken from AdCSI, AwCSI and VMFI annual financial data over a period of ten years (2008-2017). The collected quantitative data was analyzed using descriptive and inferential statics, while content analysis was employed to analyze the qualitative data gathered through interview. The findings to the study inverse relationship between the depth of outreach of MFI and Number of office, Cost per borrower, Average outstanding balance /GNI per capital and write off during the period. The negative coefficients of these indicators mean that there is risk business environment. It shows that Write-Offs During the Period (WODP),number of office , cost per borrower and Average outstanding balance /GNI per capital has negative indications to the profitability of Selected Micro finance performance leads to insignificant by decline the profitit of institution’s. The studied MFIs were found to be fairly good in terms of their social performance based on critical dimensions of targeting and outreach products and services, benefits to clients and social responsibility. In order to enhance their profitability, the targeted MFIs are suggested to give utmost attention to their cost of borrower, number of office, Average outstanding balance/GNI per capital and write off during the period.