The Relationship Between Financial Sustainability and Outreach of Microfinance Institutions in Kenya
Abstract
Microfinance institutions have grown in the last few years and are now under the
spotlight of development experts due to their stellar performance in making credit access
to the poor easier. However the performance of MFIs is based on the two concepts,
outreach and sustainability. MFIs indeed need to be self-sustaining if they are to achieve
their outreach goal of providing financial services to the poor. The objectives of this
study were to identify the levels of financial sustainability, assess the levels of depth of
outreach of the microfinance institutions in Kenya and establish the relationship between
sustainability and outreach.
This study adopts a descriptive survey design approach to identify what levels of
financial and depth of outreach has been achieved. A sample of 30 MFIs was selected.
Regression model was also used to establish the relationship between sustainability and
outreach.
The findings of this study portray that the increase in branches, average number of active
clients and the high percentage of women clients has enabled achievement of a greater
depth of outreach. This greater depth of outreach has then greatly influenced the financial
sustainability of MFIs. It also shows a positive correlation between outreach and financial
sustainability. Finally the study concludes that there is a strong relationship between
financial sustainability and outreach of MFIs in Kenya.
Citation
Kidzuga, Hassan A.;2013.The Relationship Between Financial Sustainability And Outreach Of Microfinance Institutions In Kenya.Publisher
University of Nairobi School of Business