College of Development Studies

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Browsing College of Development Studies by Author "Abba, Asefa"

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    An Assessment of the commercialization Performances of Microfinance Institutions in Ethiopia: Achievements, Challenges and Implications: The case of Selected MFIs
    (Addis Ababa University, 2014) Abba, Asefa; Paul, Issac (PhD)
    Microfinance is one of the most powerful tools for combating poverty primarily by providing financial services to the excluded segments of the society so as to run their businesses, build assets, smooth consumption, and manage risks. As, micro finance industry as a whole is challenged by the need to reach the excluded segments/poor and at the same time being financially self-sufficient/sustainable, this study has designed to assess commercialization performances of . MFIs in Ethiopia along with related challenges and implications, at least to indicate the current position of Ethiopian micro finance industry for researchers, practitioners and policy makers. The study used both secondary and primary data collected from selected MFIs and key stakeholders such as NBE and AEMFI With regards to data analysis, the study categorizes the sample MFIs based on affiliations and scale, and made descriptive and trend analysis, and in-depth comparative analysis through One Way ANOVA and Kruskal-Wallis test, and Applied Pearson Correlation Coefficients on key performance indicators. As per the study findings, Ethiopian Microfinance Institutions have shown continuous improvements in the commercialization performances through time though there are limitations. Here, government-backed and large MFIs peer groups have proved to be efficient, profitability and sustainability. As a result of better efficiency and scale of operations, these groups also charge low interest rates and beller breadth of outreach. With respect to the depth of outreach. however the means differences were not significant, NGO-backed and small MFIs seem to reach the poorest section of the society. Nonetheless, the study has also proved that the level of mission drift as a result of commercialization of micro finance operations and administration is not significant. Key Words: Microfinance, Commercialization. sustainability and outreach