Performance of Selected Microfinance Institutions in Ethiopian: A Balanced Scorecard Approach
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Date
2014-11
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Addis Ababa University
Abstract
This study analyze the performance of selected microfinance institutions in Ethiopianusing a
balanced score card (BSC) performance analysis approach which integrate both financial and
nonfinancial metrics.
The BSC framework of the study developed using a total of 20
performance indicators which were equally categorized under the 4 BSC perspectives
(financial, customer, internal business process and learning and growth). The developed
framework applied to purposively selected8 MFIs operating in Ethiopia which have head office
in Addis Ababa and report to Association of Ethiopian Microfinance Institutions (AEMFI)
starting from 2007-2012 consecutively.
Quantitative research approach adopted and primary data collected using five scale Likert and
secondary data obtained from AEMF used. A total of 10 microfinance experts, 110 staffs and
60 clients participated in the study. The analysis is done using descriptive statistics and SPSS
version 21 used. The findings of the study shows based on financial performance results, on
average the institutions reviewed were sustainable with high relative productivity and low
profitability. The average nonfinancial performance was also high, indicating that the studied
institutions were highly performing in nonfinancial measures likewise the financial.
Beside the performance results the findings of this study confirmed the relationship assumption
of BSC perspectives and it shows positive correlation among them. The study concludes
comprehensive performance is observed when measured in a collective way. So, Ethiopian
MFIs suggested paying attention on the use of BSC as a performance measurement tool and
also hub to specified performance indicators that needs enhancement.
Key words: - Microfinance, Performance and BSC
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Keywords
Microfinance; Performance and BSC