Does the pursuit of outreach consistently stifle the financial performance of microfinance institutions in sub-Saharan Africa?. Issue 3 (2nd April 2020)

• Record Type: Journal Article
• Authors: Chikalipah, Sydney
• Is Part Of: Development in practice. Volume 30:Issue 3(2020)
• Page Start: 409
• Page End: 420
• Publication Date: 2020-04-02
• Subjects: Labour and livelihoods – Microfinance, Poverty reduction -- Sub-Saharan Africa; Technical assistance -- Developing countries -- Periodicals; Economic assistance -- Developing countries -- Periodicals; Developing countries -- Economic conditions -- Periodicals; 338.91091724
• DOI: 10.1080/09614524.2019.1680607
• Languages: English
• ISSNs: 0961-4524

Abstract

ABSTRACT: This article studies the relationship between outreach and the financial performance of 479 microfinance institutions (MFIs) in 37 countries of sub-Saharan Africa (SSA), covering the period 1998–2012. Findings indicate a positive and statistically significant relationship between outreach and the financial performance among MFIs in SSA. Providing small microcredits below the US$600 threshold is associated with lower profitability than larger loans, and MFIs serving more than 30, 000 clients reported a stronger financial performance than those serving fewer than 30, 000. The study findings have implications for managers and stakeholders in the microfinance industry of SSA.