Financial Performance and Sustainability of Microfinance Institutions in Morocco: A Structural Equation Model

Khawla Chedad, Ayoub Boukir, Sanae Chaabi, Samir Aguenaou and Jawad Abrache
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Khawla Chedad: School of Business Administration, Al Akhawayn University, Ifrane, 53000, Morocco.
Ayoub Boukir: School of Business Administration, Al Akhawayn University, Ifrane, 53000, Morocco.
Sanae Chaabi: School of Business Administration, Al Akhawayn University, Ifrane, 53000, Morocco.
Samir Aguenaou: School of Business Administration, Al Akhawayn University, Ifrane, 53000, Morocco.
Jawad Abrache: School of Business Administration, Al Akhawayn University, Ifrane, 53000, Morocco.

International Journal of Economics and Financial Issues, 2022, vol. 12, issue 1, 51-57

Abstract: The following contribution investigates the main determinants that impact the financial performance and sustainability of Moroccan microfinance institutions (MFIs) in terms of governance indicators, staff productivity variables, and loans portfolio quality. Using an unbalanced panel data extracted from the Mix Market database and using structural equation modelling, 10 Moroccan MFIs were analysed for the period between 1999 and 2017. Results indicate that there is no evidence of the impact of the regulatory environment and portfolio quality on these institutions profitability, which is represented by the return on assets (ROA) and return on equity (ROE), and sustainability, which is represented by the operational self-sufficiency (OSS) and the number of active borrowers. However, results indicate that personnel productivity has a significant positive direct impact on both profitability and sustainability. This study provides guidance to policy makers in terms of enhancing the performance of personnel productivity of these institutions in the Moroccan context.

Keywords: Microfinance Institutions; Structural Equation Modelling; Sustainability; Morocco (search for similar items in EconPapers)
JEL-codes: E02 G21 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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