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Microfinance financial sustainability and outreach: is there a trade-off?

Sefa Awaworyi Churchill ()
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Sefa Awaworyi Churchill: RMIT University

Empirical Economics, 2020, vol. 59, issue 3, No 12, 1329-1350

Abstract: Abstract The financial sustainability of microfinance institutions (MFIs) is crucial for the continual existence of the microfinance industry. As a result, emphasis has been placed on the financial sustainability of MFIs over the past few years. However, with the primary goal of the industry being the attainment of social outreach, the emphasis on financial sustainability has raised concerns about a potential adverse effect on outreach. Using data on 1595 MFIs in 109 countries, we examine if there is a trade-off between financial sustainability and outreach. The evidence shows that there is a trade-off between sustainability and outreach depth, but complementarity between sustainability and outreach breadth.

Keywords: Microfinance; Outreach; Sustainability; Profitability (search for similar items in EconPapers)
JEL-codes: G21 L31 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s00181-019-01709-1

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