2016

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Determinants Of Financial Sustainability In Microfinance Institutions: Evidence From SOUTHASIA
(UMT,Lahore, 2016-10-08) MARYAM SHAHID
Purpose - The aim of this research is to examine different determinants of sustainability of microfinance firms and to find out which of those determinants have a significant impact on sustainability of microfinance firms. Another objective of this research is to study the impact of microfinance firm profit status, legal status, regulatory status and age on its sustainability. Design/Methodology/Approach - Unbalanced panel data is collected consisting of 1945 observations of 243 microfinance institutions from 5 countries of south Asia region over the period 2000-2016. The variables under study include outreach, efficiency ratios, firm performance indicators, portfolio risk indicators and institutional indicators. Findings – Results of the study show that outreach, portfolio risk indicators and firm financial indicators are most important and significant determinants in determining the sustainability of microfinance firms. Moreover, it is also concluded from results that NGO’s perform best in terms of outreach and BANKS show high performance in terms of firm financial performance. Managerial implications – This study will help policy makers and decision makers in making microfinance firms more financially sustainable.