Financial sustainability of microfinance institutions in sub-Saharan Africa: evidence from GMM estimates

Q4 Social Sciences

Enterprise Development and Microfinance Pub Date : 2017-09-01 DOI:10.3362/1755-1986.16-00023

Sydney Chikalipah

引用次数: 19

Abstract

This paper examines what determines financial sustainability among 324 microfinance institutions (MFI) in 33 sub-Saharan African countries for the period covering 2003 to 2014. Using a well-specified Generalized Method of Moments (GMM) estimation technique, the empirical results provide strong evidence that return on assets (ROA) is the major determinant of financial sustainability of microfinance institutions in sub-Saharan Africa. This significant finding suggests that MFIs’ ability to generate higher net income from their credit portfolio is the critical factor for achieving financial sustainability. The implication of these findings is that MFIs should implement robust pre-loan screening systems, which can assess the creditworthiness of borrowers. This would undoubtedly contribute to reducing the loan default rates among MFIs operating in the region.

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撒哈拉以南非洲小额金融机构的财务可持续性：来自GMM估计的证据

本文研究了2003年至2014年期间，在33个撒哈拉以南非洲国家的324家小额金融机构中，是什么决定了金融可持续性。使用一种明确的广义矩方法（GMM）估计技术，实证结果提供了强有力的证据，表明资产回报率是撒哈拉以南非洲小额金融机构财务可持续性的主要决定因素。这一重要发现表明，小额金融机构从其信贷组合中产生更高净收入的能力是实现金融可持续性的关键因素。这些发现的含义是，小额金融机构应该实施强有力的贷前筛选系统，该系统可以评估借款人的信用。这无疑将有助于降低在该地区经营的小额金融机构的贷款违约率。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Enterprise Development and Microfinance Social Sciences-Development

CiteScore

0.60

自引率

0.00%

发文量

期刊介绍： EDM encourages critical thinking on how market systems can be more inclusive and sustainable, with concrete implications for designing, implementing, and evaluating business support programmes. EDM is essential reading for practitioners, researchers, donors, policymakers, and finance specialists engaged in market-related activities involving poor people in the global South. The coverage includes but is not restricted to: • Financial inclusion (inclusive financial services and products) • Emerging financing models (impact investment, responsible finance, social lending) • Value chain analysis and development • Inclusive business models • Equity (gender, youth, marginalized) in access to financial services and value chains • Political and regulatory framework for SME development and financial services • ICT for business development and financial services • Sustainability standards • Advisory services for SMEs • Impact assessment.