Tier 1 MFIs Financial Performance: Cash-flow statement analysis

Gautier Dumont and Mathias Schmit

No 13-054, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: When assessing the financial performance of Microfinance institutions, the current literature commonly uses balance sheets and income statements. In order to assess sources of cash generated, if any, we analyse the cash flow statements of the 30 largest MFIs that display audited reports between 2006 and 2010. We find that all the MFIs of the sample had cumulated negative free cash flow over the period and positive cash flow from operations. We propose classification of MFIs based on their investment and financing policies to assess the risk for their depositors. The results based on cash-flow analysis to assess financial performance can substantially differ from what can be read in the literature.

Keywords: microfinance; financial performance; cash-flow statement; depositor; corporate finance; payout policy (search for similar items in EconPapers)
JEL-codes: G21 G35 O16 (search for similar items in EconPapers)
Pages: 24 p.
Date: 2013-12-23
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