Financial Sustainability and Outreach of Microfinance Institutions in Ethiopia: the Case of Oromia Credit and Saving Share Company
No Thumbnail Available
Date
2008-07
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
In microfinance industry, sustainability is one of the crucial issues attracted the attention of many
researchers. This is because it is widely believed that without being sustainable, microfinance
institutions can not achieve their objective of reducing poverty. However, some microfinance
institutions give little attention to sustainability. They depend on subsidy from government and
donor organizations. They also concentrate on providing credit services and ignore saving
services which result in lack of reliable source of loan funds. These problems were the major
motivations for undertaking this research. This paper attempts to study sustainability of
microfinance institutions in Ethiopia taking Oromia Credit and Saving Share Company as case
study. For this study both primary and secondary data were used. The data gathered were
analyzed by using ratios and percentages. The results indicate that the institution, like other
microfinance institutions (MFIs) partly depend on subsidies for the loans it provides. With
regard to financial sustainability, it is in good condition. The outreach is increasing in terms of
number of clients. The overall efficiency of the institution is improving. However, its
performance is weak on areas such as saving mobilization, women participation, and loan officer
productivity
Description
Keywords
Saving share company