scholarly journals Influence of Financial Leverage on Financial Sustainabilit: A Case of A Microfinance Institution in Kenya

2021 ◽  
Vol 3 (1) ◽  
pp. 1-17
Author(s):  
Stephen Kosgei Bitok ◽  
Josephat Cheboi ◽  
Ambrose Kemboi
Keyword(s):  
Fixed Effect Model ◽  
Vital Role ◽  
Strategic Decision ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Financial Leverage ◽  
Life Cycle Theory ◽  
Specific Objective ◽  
Microfinance Institution ◽  
Approach Method

Microfinance institution plays a crucial role in economic development and financial inclusion. Financial sustainability is the key dimension to microfinance institutions growth. Which further indicate the importance of which Financial sustainability is. Therefore, the present study investigated the effect of financial leverage on MFI financial sustainability. The specific objective was to establish the effect of financial leverage on the financial sustainability of MFIs. The study was guided by agency theory and life-cycle theory. The study adopted an explanatory research design where a panel approach was used as well as the positivist paradigm. The study adopted the census approach method. Panel data was drawn from 30 MFIs for a period between 2010 and 2018 from the mix market database using the data collection schedule. The study used both descriptive and inferential statistics to analyze data with the help of STATA software. Fixed effect model based on Hausman test (X2 = 45.41, p= 0.000 ≤ 0.05). Based on the findings of the study financial leverage ( the study had a positive and significant effect on the financial sustainability of MFIs. The study recommended MFIs managers to engage in the prudent use of financial leverage so that they enhance their overall profitability and boost investor confidence in their strategic decision-making resulting in financial sustainability. The results have an implication to business managers and policymakers given the vital role in service delivery and the challenges hindering the sector from the realization of financial sustainability in the economy.

scholarly journals Islamic Economic Orientation Model for Microfinance Institution

2019 ◽  
pp. 676-682
Author(s):  
Ahmad Wira ◽  
Hulwati Hulwati ◽  
Huriyatul Akmal ◽  
Riandy Mardhika Adif ◽  
Jufriadif Na`am
Keyword(s):  
Social Change ◽  
Action Research ◽  
Participatory Action Research ◽  
Microfinance Institutions ◽  
Participatory Action ◽  
Orientation Model ◽  
Microfinance Institution ◽  
Approach Method ◽  
Islamic Economic

This study formulated a model of Islamic economic orientation towards microfinance institutions (MFIs) in Solok Indonesia. The approach method used is Participatory Action Research (PAR) on Islamic economics in social change. This study produces three models of Islamic economic orientation, namely social, profit and social-profit. Thus, this research helps the community in implementing a more reliable Islamic economy.

COMPARISON OF PERFORMANCE OF MICROFINANCE INSTITUTIONS WITH COMMERCIAL BANKS IN INDIA

2012 ◽  
Vol 01 (06) ◽  
pp. 110-120
Author(s):  
Zohra Bi ◽  
Shyam Lal Dev Pandey
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Information Exchange ◽  
Financial Structure ◽  
Financial Data ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Access To Finance ◽  
Development Tool ◽  
Microfinance Institution

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.

AKIBAT HUKUM PENDIRIAN LEMBAGA KEUANGAN MIKRO OLEH BADAN HUKUM KOPERASI

2018 ◽  
Vol 4 (1) ◽  
pp. 35-50
Author(s):  
Zakiah Noer
Keyword(s):  
Microfinance Institutions ◽  
Microfinance Institution ◽  
Legal Consequences ◽  
Year 2013

This research is underlined by the existence of cooperative business activities which collect and distribute funds over its members, and also to its non-members. In order to avoid the violation of the provisions in Act No. 25 Year 1992 about Cooperatives, cooperative has established a microfinance institution (MFI) which called as Cooperative MFI. The establishment of microfinance institutions causes the legal consequences on several aspects because of the different regulations between Cooperative and MFI according Act No. 25 Year 1992 about Cooperatives and Act No.1 Year 2013 about Microfinance Institutions

scholarly journals Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence

2021 ◽  
Vol 6 (1) ◽  
Author(s):  
Laxmi Remer ◽  
Hanna Kattilakoski
Keyword(s):  
Empirical Evidence ◽  
Cost Management ◽  
Sub Saharan Africa ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Return On Assets ◽  
Industry Development ◽  
Management Measures ◽  
Self Sufficiency ◽  
Sub Saharan

AbstractThe topic of financial sustainability in microfinance institutions has become more important as an increasing number of Microfinance Institutions (MFIs) seek operational self-sufficiency, which translates into financial sustainability. This study aims to identify factors that drive operational self-sufficiency in microfinance institutions. To accomplish this, 416 MFIs in sub-Saharan Africa are studied and several drivers for operational self-sufficiency are empirically analyzed. Results indicate that these drivers are return on assets, and the ratios total expenses/assets and financial revenues/assets. The results imply that MFIs should encourage cost-management measures. They also reveal that there may not be a significant tradeoff in self-sufficiency and outreach. These findings will enable microfinance institutions worldwide to sharpen their institutional capabilities to achieve operational self-sufficiency and also provide policymakers with more focused tools to assist industry development.

Study of Financing Policy on the Development of Strategic Emerging Material Industry

2014 ◽  
Vol 644-650 ◽  
pp. 4848-4851
Author(s):  
Cun Ping Liu ◽  
Yong Fu Yuan ◽  
Yan Xiong Yang ◽  
Sheng Guo
Keyword(s):  
Financial Support ◽  
Vital Role ◽  
Material Industry ◽  
Rapid Progress ◽  
Financing Policy ◽  
Emerging Industries ◽  
The Core ◽  
Life Cycle Theory ◽  
Modern Economy ◽  
New Industry

As the core of modern economy, finance plays a vital role in the development of strategic emerging industries. A rapid progress of these industries demands a well formed financial support system and a full play given to the role financial support. According to emerging industries life cycle theory, the characteristics of new industry and its law of development determine its funding requirement in various stages of development. This paper analyzes the characteristics of strategic emerging material industries and proposes financing policy in its different stage.

Trade-off between financial sustainability and outreach of microfinance institutions

2015 ◽  
Vol 5 (2) ◽  
pp. 231-250 ◽  
Author(s):  
Mira Nurmakhanova ◽  
Gavin Kretzschmar ◽  
Hassouna Fedhila
Keyword(s):  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Trade Off
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