The Relationship Between Mfi Outreach Services and Financial Sustainability in Kenya
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Date
2013-10Author
Chemining'wa, Abraham T
Type
ThesisLanguage
enMetadata
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The overall objective of the study was to establish the relationship between microfinance
outreach and financial sustainability in Kenya. The study specifically aimed at
establishing the relationship between breadth of outreach, depth of outreach and portfolio
at risk, and microfinance institutions’ financial sustainability in Kenya. Achieving
financial sustainability is critical for microfinance institutions self-sustaining programs
independent of subsidies that facilitate expanded outreach and attraction of external
funding. Most studies in Kenya had focused more on organizational sustainability and
fewer attempts had been made to study factors affecting microfinance institutions
financial sustainability in Kenya. It is from this perspective that this study was
undertaken to statistically identify possible determinants of financial sustainability among
microfinance institutions in Kenya. Descriptive design was employed and it was found
suitable for the study since it aimed at establishing the relationship between microfinance
outreach variables and financial sustainability. Similar studies had also used the same
research design. The population for the study was composed of 46 retail and deposit
taking microfinance institutions in Kenya. Secondary data was collected from 8
purposively selected microfinance institutions reporting voluntarily their financial
information to the microfinance information exchange portal over the period 2007-2011.
Multi-regression analysis was then carried out on a panel data collected in order to
establish relationships between variables. The study employed ANOVA tool for
inference. Significant relationship between depth of outreach measured as average loan
sizes and financial sustainability was evident among microfinance institutions in Kenya.
However, the microfinance institutions breadth of outreach and portfolio at risk were
insignificantly associated with financial sustainability. From the econometric results, it
was concluded that depth of outreach affect microfinance institutions financial
performance in Kenya. The study therefore recommends that managers in the
microfinance sector in Kenya can achieve greater financial sustainability with higher
average loan sizes.
Citation
Chemining'wa,Abraham T.;October,2013.The Relationship Between Mfi Outreach Services And Financial Sustainability In Kenya.Publisher
University of Nairobi School of Business