Social Microfinance Foundation annual report 2010

Philippines needs assessors

Micro Finance Institutions (MFIs) rejuvenate economic prowess in developing countries, after severe shocks like wars, droughts and floods. MFIs are a promising tool to tackle poverty and improve food security. Sustainability of MFIs based on their capital structure ensures sustainability in poverty reduction and improved food security. The limited literature on the impacts of capital structures on MFI performance necessitated the study. Panel data from 14 MFIs was collected based on availability and accessibility. The sources of data were financial and income statements covering five years. Econometric analysis using STATA software was done following methodologies of Bogan and Rosenberg. MFIs lent to both individuals and groups and 79% were not regulated by the Central Bank, 86% had their funding sources as loans, grants, excluding deposits/savings and 73% attained operational self-sufficiency. Debt and grants were negatively correlated to operational and financial sustainability. When sustainability was more constricted to financial sustainability, debt and share capital remained noteworthy. Other than grants, debt was paid back on competitive market interest rates most especially debts from money lenders, whereas share capital fetched in revenues to the MFIs at market interest rates from the borrowers. Grants and debt had a substantialdamagingconsequence on MFI performance. Capital structure was essential in MFIs' sustainability. MFI specific characteristics, like management were also important. Subject to sampling uncertainties, the results indicate that adding to regulation by Central Bank, MFIs must specialize their lending to reduce portfolio at risk. MFIs must reduce dependence on debts and grants and resort to accumulating share capital for long-term sustainability.

2006

In recent times, Microfinance Institutions (MFIs) have begun sharpening their focus on marketing strategies amid rising competition. MFIs are also faced with the challenge of meeting both financial and social performance targets, which has drawn the attention of both industry observers and academics. This paper discusses the nature of the relationship between MFIs’ marketing strategies and financial and social performance. In order to determine the impact of marketing strategies on the financial and social performance (or the double bottom line) of microfinance institutions, a multivariate model has been used wherein the marketing strategies are the independent variables and the financial and social performance are dependent variables. To give the study a global perspective, the moderating effect of the macro-environment on the relationship between the marketing strategies and social and financial performance of MFIs is also factored in. Hence, MFI executives from India and East Afr...

The EMN aisbl supports the edition of a biennial survey on microfinance in Europe. The aim is to offer the readers an overall view of the European microfinance market, thus deepening the understanding of core issues such as scale, outreach, sustainability, and social and financial performance. This seventh edition of the Report on microfinance in Europe provides an overview of the development of the sector in terms of the main institutional characteristics, the microloan portfolio, and the social and financial performance for the period 2014-2015. The Report is based on data collected through a survey which was carried out as a collaboration between the European Microfinance Network (EMN) and the Microfinance Centre (MFC) for the first time. 149 Microfinance Institutions across 22 European countries contributed to this Report. The institutions surveyed are exclusively members of EMN and MFC or members of National Networks affiliated with EMN. The Report 2014-2015 was carried out by Fondazione Giordano Dell’Amore.

Micro Finance Institutions (MFIs) rejuvenate economic prowess in developing countries, after severe shocks like wars, droughts and floods. MFIs are a promising tool to tackle poverty and improve food security. Sustainability of MFIs based on their capital structure ensures sustainability in poverty reduction and improved food security. The limited literature on the impacts of capital structures on MFI performance necessitated the study. Panel data from 14 MFIs was collected based on availability and accessibility. The sources of data were financial and income statements covering five years. Econometric analysis using STATA software was done following methodologies of Bogan and Rosenberg. MFIs lent to both individuals and groups and 79% were not regulated by the Central Bank, 86% had their funding sources as loans, grants, excluding deposits/savings and 73% attained operational self-sufficiency. Debt and grants were negatively correlated to operational and financial sustainability. When sustainability was more constricted to financial sustainability, debt and share capital remained noteworthy. Other than grants, debt was paid back on competitive market interest rates most especially debts from money lenders, whereas share capital fetched in revenues to the MFIs at market interest rates from the borrowers. Grants and debt had a substantialdamagingconsequence on MFI performance. Capital structure was essential in MFIs' sustainability. MFI specific characteristics, like management were also important. Subject to sampling uncertainties, the results indicate that adding to regulation by Central Bank, MFIs must specialize their lending to reduce portfolio at risk. MFIs must reduce dependence on debts and grants and resort to accumulating share capital for long-term sustainability.