Assessment of Financial Performance of Microfinance Institutions in Ethiopia
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Date
2023-04-09
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A.A.U.
Abstract
The purpose of this study was to assess the Assessment of Financial Performance of Microfinance Institutions in Ethiopia. More specifically, the study has attempted to investigate the effect of security administration, loan lending, and loan product management on financial performance of micro finance institutions. The study used mixed research approach in which both qualitative and quantitative research approaches to minimize the inherent limitations of the approaches. Explanatory sequential design allowed the researcher first to collect quantitative data and then gather qualitative data to provide explanation on the results of the quantitative study. The correlational results of this study showed the presence of positive and significant correlation between the independent variables and the dependent variable (financial performance). More specifically, Lending (loan processing and lending priority), Security administration, and product management have been found to be correlated positively and significantly with financial performance of MFIs of the studied firms (p value <0.05). Product management, Security administration, Lending (loan processing and lending priority) predicts 66.9% variability on financial performance rating. The study recommends the accesses to financial and non-financial services have been the key factor to the growth of small business owners in Ethiopia. Regarding to these MFIs should provide available and reasonable loan/credits as well as provide the participator loan criteria for micro and small enterprise in the country.
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MFIs, Security Administration, Loan Lending, and Loan Product Management