The relationship between outreach and financial performance for microfinance institutions in Burundi
The objective of this study was to establish the relationship between Outreach and Financial Performance of MFIs in Burundi. The study had three specific objectives of establishing how average loan size, number of active loan accounts and number of women borrowers affect profitability of MFIs in Burundi. The study adopted a descriptive research design which assisted to examine the relationship between outreach and financial performance of MFIs. The sample size as well as the population of the study was fifteen MFIs. The response rate was fifty three percent which comprised eight MFIs. Data was gathered using a data collection schedule and analysed using SPSS. The overall finding and conclusion of the study was that all the measures of outreach used in this study are not significant predictors of profitability of MFIs in Burundi. The average loan size was found to be insignificant in explaining profitability of MFIs in Burundi. The number of active loan accounts and number of women borrowers were also found not to explain the profitability. Due to the fact that women empowerment is an ingredient of inclusive growth, the government should continue to enhance policies related to women empowerment. This will improve poverty reduction and continue to create a stable society and population in Burundi. Based on the findings another study can be conducted in Burundi but should expand the variables. Other variables that could be included are the interest rate, margin or spread, operating costs, competition from cooperatives and commercial banks. A study that measures outreach by the number of men borrowers would also be recommended. The findings of the study in some areas concur with past studies while in others it contradicts past findings by other scholars.