FACTORS AFFECTING THE TRANSFORMATION OF MICROFINANCE INSTITUTIONS INTO COMMERCIAL BANKS IN ETHIOPIA; IN THE CASE OF TSEDEY BANK

Abstract

This study aimed to investigate factors affecting the transformation of microfinance institutions into commercial banks; in the case of tsedey bank taking large MFIs in Ethiopia. The study was conducted using an explanatory research design to attain this study. The study employs a mixed-methods approach, combining qualitative and quantitative data collection methods to gather and estimate primary and secondary data sources. Semi-structured interviews with MFI directors and interpreters will give in-depth insights into the motives behind the transformation. For the study, a comprehensive analysis of financial data from among the 46 registered MFIs that were presently members of AEMFI selected AMHARA CREADIT AND SAVING MFIs transforming would conducted to assess the economic implications of the shift. The identified factors influencing the transformation process would categorized into internal and external factors By assaying these factors, the study aims to give a holistic understanding of the challenges and opportunities associated with the transformation. The findings of this research would contribute to the existing literature on microfinance and banking transformations, particularly in the environment of developing economies. Likewise, the study's recommendations may help policymakers, regulatory bodies, and industry practitioners formulate strategies that facilitate a smooth and successful transition for MFIs into commercial banks, ensuring sustainable financial inclusion and economic development in Ethiopia.