scholarly journals A Survey of Literature on the Sustainability of Grameen Bank

2008 ◽  
pp. 71-88
Author(s):  
Mamunur Rashid ◽  
Dr. Taslima Begum ◽  
Md. Mizanur Rahman ◽  
Md. Monimul Haque
Keyword(s):  
Poverty Alleviation ◽  
Secondary Data ◽  
Operating Costs ◽  
Living Standard ◽  
Financial Sustainability ◽  
Rural Poor ◽  
Microfinance Institutions ◽  
Grameen Bank ◽  
Group Lending ◽  
Soft Term

This paper is designed to survey the existing literatures on the issue of financial sustainability of microfinance institutions working with group-lending approach. The paper is based on secondary data and information. The most highlighted feature of microfinance program is embodied in the innovation of group-lending approach introduced by the Grameen Bank (GB) in Bangladesh. Even though most of the micro­finance institutions have their striking results of reaching to the poorest borrowers with high repayment rates, most of them are, however, still dependent on the subsidized or soft-term loans. Grameen Bank, with all its success in poverty alleviation and in increasing living standard of the rural poor, is yet to achieve financial sustainability to a fullest form. Should it increase the lending rate, should it reduce its operating costs to a greater extent, or should it try to diversify its investment, or should it try to mobilize savings as a base for re-lending? All these questions are still open for further research and planning.

scholarly journals Microfinance accountability in Cameroon: a cure or a curse for poverty alleviation?

2017 ◽  
Vol 13 (1) ◽  
pp. 112-130 ◽  
Author(s):  
Fidelis Kedju Akanga
Keyword(s):  
Poverty Alleviation ◽  
Secondary Data ◽  
Unintended Consequences ◽  
Institutional Pressures ◽  
Microfinance Institutions ◽  
Content Type ◽  
Study Approach ◽  
Local Actors ◽  
Accountability Practices

Purpose The purpose of this study is to use empirical findings to identify the different forms of accountability practices existing in Cameroon microfinance institutions (MFIs) and explore how such practices have evolved and institutionalised within the microfinance sector in Cameroon through time. Design/methodology/approach This study is designed to investigate if the institutionalised accountability practices within the microfinance sector in Cameroon are a cure or a curse for poverty alleviation. This study is based on the new institutional sociology (NIS) and on a case study approach and combines in-depth interviews and secondary data sources. Findings This study identifies three principal forms of accountability practices common with MFIs in Cameroon: dysfunctional, manipulative and dribbling accountabilities. Originality/value This paper is novel because it extends the NIS into the microfinance sector and explains how conflicting institutional pressures resulting from differences of accountability practices can be resolved and also exposes the unintended consequences of both resistance and passive actions of local actors on microfinance, the poor and poverty alleviation.

scholarly journals Determinants of Financial Sustainability of Microfinance Institutions in Ghana

2015 ◽  
Vol 7 (4(J)) ◽  
pp. 71-81
Author(s):  
Gershwin Long
Keyword(s):  
Financial Services ◽  
Market Failure ◽  
Negative Relationship ◽  
Secondary Data ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Efficiency Ratio ◽  
Academic Literature ◽  
Administrative Efficiency ◽  
High Level

The importance of microfinance to developmental objectives relating to access to financial services, poverty alleviation, inequality reduction, and providing a solution to financial market failure among others cannot be over-emphasized. Academic literature confirming this is abundant. However the sustainability of these institutions has been a major concern in the recent past. This study seeks to determine what drives financial sustainability of microfinance institutions within the Ghanaian context. The study follows a quantitative approach using secondary data sourced from MIX Market. An unbalanced panel dataset from 25 Ghanaian microfinance institutions over six years (2006-2011) was used. Econometric results found that sustainability of microfinance institutions is positively related to the yield on gross portfolio and administrative efficiency ratio and negatively related to staff productivity. The direction of the staff productivity is puzzling and calls for more in-depth research to understand the source of the negative relationship between high level of staff productivity and financial sustainability.

scholarly journals Microfinance and Poverty Alleviation in Southwest Nigeria: Empirical Evidence

2016 ◽  
Vol 3 (4) ◽  
pp. 256-266 ◽  
Author(s):  
J.N. Taiwo ◽  
M.E. Agwu ◽  
A.I. Aregan ◽  
O.A. Ikpefan
Keyword(s):  
Financial Services ◽  
Poverty Alleviation ◽  
Ordinary Least Squares ◽  
Living Standard ◽  
Demand Model ◽  
Grameen Bank ◽  
Cross Sectional ◽  
The Poor ◽  
Loan Demand ◽  
Southwest Nigeria

In order to alleviate poverty and improve the living standard of the people of South-West Nigeria, it is imperative that micro/small financial services such as credit, insurance, money transfer, etc. are provided in order to engage them actively in productive activities. Globally, there are several failed policies by governments, particularly in Nigeria over the years aimed at poverty alleviation. This study examines microfinance scheme towards the dispersion of credit amongst the working poor; draws from the data collected from field survey and these were reported using tables, frequency counts and cross-tabulations to draw inferences and a loan demand model was specified and estimated using the Ordinary Least Squares (OLS) econometric technique.The study used cross-sectional data collected from selected respondents in selected areas of both the Lagos and Ogun States of Nigeria respectively. The study found that majority of the Microfinance banks in Nigeria are model after the Grameen Bank which is aimed at the poor and people with basic, little or no education and that loan demand is interest rate insensitive. Therefore, MFIs should design appropriate products that are flexible enough to meet the different needs of the poor for both production and consumption purposes. Besides, governments (local, state and Federal) should urgently tackle the infrastructural gaps such as electricity, water and efficient transportation system which impact greatly on the standard of living of the people.Int. J. Soc. Sc. Manage. Vol. 3, Issue-4: 256-266

Does Offering Microsavings Make Sense for Microfinance Institutions?

2011 ◽  
Vol 56 (2) ◽  
pp. 15-27 ◽  
Author(s):  
Kelley Bergsma
Keyword(s):  
Business Model ◽  
Financial Statements ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Grameen Bank ◽  
Significant Evidence ◽  
The Past ◽  
The Poor ◽  
Core Mission

Within the past decade, two trends have emerged in the global microfinance industry. First, there has been a recent emphasis on financial sustainability. At the same time, microfinance institutions (MFIs) have begun to offer microsavings deposit services to their clients. Could there be a link between these two trends? As MFIs offer savings deposits, do they achieve greater financial sustainability? David Hulme (2008) asserts that Grameen Bank became more financially sustainable after it changed its business model to include microsavings. However, Hulme observes that Grameen Bank also moved away from its poorest clients when it made the shift to savings. This paper explores, as MFIs have switched to offering savings, whether or not MFIs have achieved greater financial sustainability and whether or not they have moved away from their poorest clients. The data examined were collected from the financial statements of Opportunity International MFIs. The results indicate that Opportunity International MFIs that offer microsavings are more financially sustainable than those that do not. Moreover, there is no significant evidence that, by offering microsavings, Opportunity International MFIs have abandoned their poorest clients. Opportunity International MFIs could provide a model of how microfinance institutions can improve their financial sustainability without compromising their core mission to serve the poor.

Examining the Trade-off Between Social Outreach and Financial Efficiency: Evidence from Micro-finance Institutions in South Asia

2017 ◽  
Vol 18 (3) ◽  
pp. 617-628 ◽  
Author(s):  
Begum Ismat Ara Huq ◽  
Md. Abul Kalam Azad ◽  
Abdul Kadar Muhammad Masum ◽  
Peter Wanke ◽  
Md. Azizur Rahman
Keyword(s):  
Financial Performance ◽  
South Asian ◽  
Poverty Alleviation ◽  
Financial Sustainability ◽  
Group Lending ◽  
Bottom Line ◽  
Financial Efficiency ◽  
Trade Off ◽  
Lower Capacity ◽  
Social Outreach

The micro-finance institutions (MFI) have been successfully operating for poverty alleviation. The recent turmoil in financial sustainability of major MFIs worldwide has raised the question of whether trade-off exists: Financial performance cannot be achieved without sacrificing the main objective—social outreach. This article examines the presence of such a trade-off by examining the empirical evidence from 127 South Asian MFIs over 2009–2013. The findings of this article reveal that MFIs have neutral trade-off in achieving the double bottom line: financial performance and social outreach. Moreover, there is a mission drift which is caused by higher portfolio at risk and resulted in lower capacity in targeting the poorest segment of citizens. In case of social outreach, it is found that financial performance of MFIs is dependent on the size of MFIs, years of operations and lending processes (group lending).

Effects of Financial Innovations on Profitability for Deposit Taking Microfinancing Institutions in Kenya

2018 ◽  
Vol 9 (6) ◽  
pp. 529-536
Author(s):  
Martin Khoya Odipo ◽  
Keyword(s):  
Financial Institutions ◽  
Positive Relationship ◽  
Financial Institution ◽  
Secondary Data ◽  
Financial Statements ◽  
Descriptive Statistics ◽  
Primary Data ◽  
Microfinance Institutions ◽  
Financial Innovations ◽  
Strong Positive Relationship

Recent studies have documented that innovations improve profitability of firms. This article documents that deposit taking micro financial institutions that have adopted financial innovations have increased their profitability. The study covered five years between 2009-2013. Both primary and secondary data were used in the study. Primary data was obtained through administration of drop and pick questionnaires to selected employees of the institutions. Secondary data was obtained from financial statements and management reports of these deposit taking microfinance institutions. Data was analyzed using descriptive statistics, return on asset and multi-liner regression model to determine the effect of each financial innovation applied on profitability on the micro-financial institution. The results showed that most deposit taking microfinance institutions adopted these financial innovations in their current operations. There was strong positive relationship between individual innovations and profitability. In line with profitability ROA also showed improvement each year after the adoption of these financial innovations.

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.

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

The Role of Education and Technology Adaptation in Poverty Reduction in Indonesia

2021 ◽  
Vol 1 (1) ◽  
pp. 124-127
Author(s):  
Novi Firmawati ◽  
◽  
Budi Sasongko
Keyword(s):  
Economic Growth ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Moving Average ◽  
Negative Relationship ◽  
Secondary Data ◽  
Technological Adaptation ◽  
Education Investment ◽  
The People

This study examines the role of education in improving technology adoption as reflected in technology inclusion, poverty alleviation and efforts to increase community income which is reflected in economic growth. This study uses secondary data from world banks and processed regression using the moving average autoregression method. We found that education investment and technology inclusion were positively related to economic growth. And,negatively related to probability. This indicates that education plays a role in encouraging technological inclusion which reflects technological adaptation and encourages economic growth which is an indicator of the prosperity of the people in Indonesia which is strengthened by a negative relationship with poverty which indicates that education plays an important role in poverty alleviation

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