Optimal sources of financing for microfinance institutions in sub-Saharan Africa

Sydney Chikalipah

Development in Practice, 2019, vol. 29, issue 3, 395-405

Abstract: This article studies the relationship between different sources of finance and the financial performance of microfinance institutions in 36 sub-Saharan African countries. The analysis is based on a panel dataset of 471 microfinance institutions over the period 1995 to 2012. By applying the GMM estimator, the results suggest that first, there is a positive and robustly significant relationship between equity and the financial performance of microfinance institutions; and second, debt and microsavings negatively affect the financial performance of microfinance institutions in the sub-Saharan African region. Therefore, the optimal source of finance for microfinance institutions in sub-Saharan Africa is equity. More importantly, the policy recommendation is that private or public partners must support MFIs financially; doing so could contribute to extending financial services to the poor in sub-Saharan Africa.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09614524.2018.1519011 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:cdipxx:v:29:y:2019:i:3:p:395-405

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/cdip20

DOI: 10.1080/09614524.2018.1519011

Access Statistics for this article

Development in Practice is currently edited by Emily Finlay

More articles in Development in Practice from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().