Does the pursuit of outreach consistently stifle the financial performance of microfinance institutions in sub-Saharan Africa?

Sydney Chikalipah

Development in Practice, 2020, vol. 30, issue 3, 409-420

Abstract: This article studies the relationship between outreach and the financial performance of 479 microfinance institutions (MFIs) in 37 countries of sub-Saharan Africa (SSA), covering the period 1998–2012. Findings indicate a positive and statistically significant relationship between outreach and the financial performance among MFIs in SSA. Providing small microcredits below the US$600 threshold is associated with lower profitability than larger loans, and MFIs serving more than 30,000 clients reported a stronger financial performance than those serving fewer than 30,000. The study findings have implications for managers and stakeholders in the microfinance industry of SSA.

Date: 2020
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DOI: 10.1080/09614524.2019.1680607

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