Financial sustainability and outreach in microfinance institutions: evidence from MENA countries

ABSTRACT

Microfinance Institutions (MFIs) have a significant role in filling the gap between the formal financial institutions and the poor people. This study aims at estimating the interaction between outreach and financial sustainability in MENA countries. The study examines 82 MFIs for 2004–2018, ends up with 133 observations. A panel data technique is employed for model specification. Our findings confirm a trade-off between financial sustainability and outreach performance by MFIs in MENA countries, and we recommend that MFIs must take care of the management of financial ratios, such as ROA, ROE and OSS and performance, to achieve financial sustainability and outreach.

KEYWORDS:

• Microfinance institution
• outreach
• financial sustainability

Disclosure statement

No potential conflict of interest was reported by the author(s).