The Effect Of Outreach On Financial Performance Of Microfinance Institution In Ethiopia

Abstract

Across African regions, MFIs in East Africa are the most profitable while those in West Africa generate positive returns. The question, however, remains as to whether this profitability is because of increased outreach or not. Such knowledge is vital in developing strategies that would enhance the expansion of outreach and hence alleviation of poverty. The study aimed to investigate the effect of outreach on financial performance of MFIs in Ethiopia. This study examines the effect of outreach on financial performance of a total of twelve microfinance institutions in Ethiopia covering the period of 2005-2014 from total population of 33 MFIs. The sample was selected purposively to examine the effect of outreach on financial performance. The study was adopted explanatory research approach.