Performance Of MFIs Research Articles

Overall Performance Evaluation of select Microfinance Institutions – an Empirical Analysis

Microfinance firms are viewed predominantly as instruments of social change, their performance has been often measured by non-financial parameters. The concept of social performance has seemed to overshadow the state of financial health of these enterprises. A microfinance institution is measured for financial sustainability based on its good financial accounts and the recognized accounting practices. The main objectives of this paper are to study the Brief Profile of Select Microfinance Institutions, to review the Overall Performance of select MFIs and to evaluate the Yield on Gross Portfolio of Select Microfinance Institutions. The data collected for the study includes secondary data. The various sources used to collect secondary data include research papers, journals, Status of Microfinance in India reports published by NABARD and various other websites. The secondary data collected is analyzed using various statistical tools and techniques such as one way ANOVA. The technique is used to identify if there exist a significant difference in the mean of different of select MFIs. As such, it has been observed based on the analysis that the average yield on gross portfolio of SML (27.81 per cent), BSFL (24.30 per cent), CMC (24.15 per cent), GVMFL (31.38 per cent), and GFSPL (28.57 per cent) recorded above the industry aggregate average (23.93 per cent), which depicts that these MFIs were relatively different in achieving high yielding on gross portfolio as compared to that of other MFIs.

How Does Competition Affect the Performance of MFIs? Evidence from Bangladesh

Over the past 20 years, Bangladesh has witnessed strong competition among microfinance institutions. Using program-level panel data from 2005-2010, this paper studies the microfinance institutions'recent competitive roles in their pricing of products, targeting strategies and portfolio shifts, as well as their ability to recover loans. The findings do not support the view that newer microfinance institutions are less risk-averse in their targeting, or that increased borrowing among households due to microfinance institution competition has lowered recovery rates. There is also a considerable urban-rural distinction; although newer microfinance institutions tend to attract riskier clients in urban areas, the opposite is true in rural areas. Loan recovery rates are also the highest among the newest microfinance institutions for women in rural areas, suggesting that microfinance institutions may offer distinct products in these areas to attract better-risk clients. The portfolio of newer microfinance institutions also has a greater share of lending for agriculture, and fewer savings products.

COMPARISON OF PERFORMANCE OF MICROFINANCE INSTITUTIONS WITH COMMERCIAL BANKS IN INDIA

Microfinance in India has been viewed as a development tool which would alleviate poverty and enhance growth of the country through financial inclusion. Out of 6 lakh villages in India, only approximately 50000 have access to finance. India is a country which has the highest number of households which are excluded from banking. With the Andhra crisis of microfinance institutions and issues that microfinance institutions have a mission drift, the aim of the paper is to study the performance and efficiency of microfinance. A sample of microfinance institutions in India have been selected based on their ratings given by microfinance information exchange (MIX) for the study. The performance of these sample MFIs as well as their performance with respect to commercial banks in India have been studied using statistically tools. A microfinance institution is measured for financial sustainability based on its good financial accounts and the recognized accounting practices they follow according to Meyer (2002). Data for the microfinance institutions have been collected from Microfinance information exchange (MIX) where few of the MFIs have started reported their financial data. The MIX has classified the MFIs based on various parameters such as level of disclosure, financial parameters etc and rated them accordingly. Out of the 88 MFIs in India reported on MIX, 24 MFIs are taken as samples, these samples taken were five star rated by MIX. The financial parameters of these MFIs are studied and compared with the financial parameters of commercial banks and their financial performance can be analyzed. The various parameters taken for analyzing the financial performance of MFIs and banks include: Financial structure, Profitability and Efficiency.

Les conséquences de la concurrence sur le marché des services microfinanciers : cas du Burkina Faso

François FATURURIMI L’article présente l’impact de la concurrence sur les performances des IMF au Burkina Faso. Contrairement à nos attentes, le modèle de base montre une corrélation positive entre la concurrence et les performances des IMF. Par contre le modèle élargi confirme l’impact positif lorsque la concurrence concerne les fournisseurs de services microfinanciers "au sens strict" et un impact mitigé lorsqu’elle est dictée par les fournisseurs "au sens large".

ANALYSIS OF CRITICAL FACTORS OF MICROFINANCE INSTITUTIONS OF PAKISTAN

This article is about the performance of Microfinance Institutions - MFIs of Pakistan. In this article the types of MFIs operating is Pakistan is discussed with their details i.e. Microfinance Banks, Rural Support Programs and NGOs. Some other organizations are also involved in micro financing but their percentage is very low. It is found that Rural Support Programs RSPs are not totally involved in microfinance but have a large chunk of funds for microfinance. Micro loans are given for various purposes including starting a new business. The real theme of microcredit is to give money to a poor person to start a small or micro business and increase his family income but micro loans are often used for many other purposes such as paying another expensive loan, paying for medical expenses of bread earner of the family, marriages, construction etc. In this research work the researcher has tried to analyze the performance of MFIs of Pakistan and to find out those factors which contribute in their effectiveness. Two approaches of microfinance i.e. Institutionists Approach and Welfarists Approach are discussed. To analyze the performance of MFIs both approaches are considered i.e. Institutionists and Welfarists. Seventeen parameters are selected, many of these are financial ratios and these are divided into four groups i.e. sustainability, transparency, outreach and efficiency. Some ratios/figures of each area of these MFIs are taken in the data and analysis is performed to find out that which ones are contributing more or less. This research can be helpful for the MFIs which want to improve their performance and check their areas of significance for further improvement and development considering their approach of alleviating poverty from the society.

Should Banks in Palestine Invest in Microfinance Market?

In this paper we will just have an overview about the Palestinian MFI’s performance, microfinance market size, advantages, obstacles and opportunities available for commercial banks in this market. By using some researches & references (referred in Page No 12) we will mention to some methods that helping the banks in entering the microfinance market and analyze the applicability of these methods for the banks in Palestine market. Summary: The microfinance market is huge and potential market with limited penetration of MFI’s working in Palestine. The current poor performance of MFIs in Palestine does not reflect the potential that a profitable market does in fact exist. All the methods mentioned above could be applied in different ways with different levels of success but the trick is in which method and how to enter this market effectively. Banks should determine what targets and goals to establish, select the right clusters and sectors, create a retail strategy and choose the optimal method to enter this market in effective ways. The micro businesses need for more than loans, and the needs for comprehensive multi-financial services makes the banks are more compatible place for them. In the same time, the banks have opportunity to serve these needs in profitable way.

Performance Analysis of a Sample Microfinance Institutions of Ethiopia

The purpose of this study is to appraise the performance of Ethiopian MFIs in terms of various criteria by comparing with the Micro banking Bulletin (MBB) benchmark and for some relative ratios comparison among themselves.The MF industry as a whole is challenged by the need to reach the poorest customers and at the same time being financially self sufficient. Although the industry as a whole is growing at a faster pace still the two critical questions of reaching the poor and building a financially sustainable MF industry that walk on their own leg freely are empirical questions. This research, although will not solve these crucial questions, will at least contribute to researchers, practitioners and policy makers by showing where the Ethiopian MFIs are lying on the outreach to the poor, sustainability, and a couple of other performance dimensions. Data for the research are taken from the MIX MARKET website. Although the actual number of Ethiopian MFIs is around 27 as per National Bank of Ethiopia database, I have data access online only for 16 MFIs from the MIX MARKET website. Hence the sample constitutes these 16 MFIs. For data analysis, I have used one sample t test, one way ANOVA with Scheffe Post Hoc Comparison tests, Kruskal-Wallis test and Pearson correlation coefficients.The result of the study indicates that Ethiopian MFIs in general are poor performers on depth of outreach. They are not reaching the poorest of the poor. They are also poor in terms of the ratio of GLP to assets, allocating a lower proportion of their total assets in to loans. They also are not using their debt capacity properly. The large and small MFIs are allocating more loan loss provision expense than the industry average and the related PAR is high for these MFIs.All the MFIs are good at breath of outreach, cost management, efficiency and productivity. They also charge low interest rates. The profitability and sustainability of the MFI depend on their size. From a simple correlation analysis it is found that there is a tradeoff between serving the poor and being operationally self sufficient. MF age correlates positively with efficiency, productivity, the use debt financing (commercialization) and OSS. It is also found that the use of debt financing makes firms more efficient and productive.

The Cost Structure of Microfinance Institutions in Eastern Europe and Central Asia

Microfinance institutions are important, particularly in developing countries, because they expand the frontier of financial intermediation by providing loans to those traditionally excluded from formal financial markets. This paper presents the first systematic statistical examination of the performance of MFIs operating in Eastern Europe and Central Asia. A cost function is estimated for MFIs in the region from 1999-2004. First, the presence of subsidies is found to be associated with higher MFI costs. When output is measured as the number of loans made, we find that MFIs become more efficient over time and that MFIs involved in the provision of group loans and loans to women have lower costs. However, when output is measured as volume of loans rather than their number, this last finding is reversed. This may be due to the fact that such loans are smaller in size; thus for a given volume more loans must be made.