BENSA DAYE CAMPUS

SENIOR RESEARCH PROPOSAL ON PERFORMANCE ANALYSIS OF

MICROFINANCE INSTITUTION IN DAYE TOWN

BY:

LAMESA BORU

Advisor: Kebede K. (Msc)

Senior research proposal submitted to the Department of Agribusiness and

value chain management in partial fulfillment of the requirement for
Bachelor of Science degree in Agribusiness and value chain management

November 2023
Daye, Sidama, Ethiopia

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ACKNOWLEDGEMENT

Above all, I would like to praise the Almighty GOD for his assistance and protection
throughout my life, and to express my deepest gratitude to him helps as doing everything
which essential for completing this proposal paper. Next, I am obliged to thank my Advisor,
Kebede K. (MSc). For his willingness to advice and guide us. This paper could not have
acquired the present standard without his dedicated effort in advising us and correcting the
draft. Thirdly, I would like to extend my gratitude to my family members. God blessed
them for their moral, financial, and lovely support from beginning of my life. Lastly but not
least I would like to give special gratitude for all friends who gave me an important and very
crucial suggestion and ideas throughout my study.

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LIST OF ABBREVIATION AND ACRONYMS

IDB Inter-American Development bank

OCSSCO Oromia Credit and saving share company

MFIs Microfinance Institutions

UNDP United Nation Development Program

MDGs Millennium Development Goals

NGOs Non-Government Organizations

CGAP Consultative Group to Assist the Poorest

USAID United States Agency for International Development

PEACE Poverty Eradication and Community Empowerment

ACSI Amhara Credit and Saving Institute

DECSI Dedebit credit and Saving Institute

AEMFI Association of Ethiopian Micro Finance Institutions

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 TABLE OF CONTENTS

Contents page
ACKNOWLEDGEMENT ................................................................................................................................... 2
LIST OF ABBREVIATION AND ACRONYMS ..................................................................................................... 3
TABLE OF CONTENTS..................................................................................................................................... 4
List of Table ................................................................................................................................................... 6
Abstract ......................................................................................................................................................... 6
CHAPTER ONE: INTRODUCTION .................................................................................................................... 8
1.1. Background of the Study .................................................................................................................... 8
1.2. Statement of the Problem.............................................................................................................. 11
1.3. Objective of the study ...................................................................................................................... 14
1.3.1. General objective of the study.................................................................................................. 14
1.3.2. Specific objectives of the study ............................................................................................... 14
1.4. Research question............................................................................................................................ 14
1.5. Significance of the study .................................................................................................................. 14
1.6 Scope and Limitation of the study .................................................................................................... 15
CHAPTER TWO: LITERATURE REVIEW ......................................................................................................... 16
2.1 Theoretical Reviews .......................................................................................................................... 16
2.1.1 Basic Concepts and Definitions .................................................................................................. 16
2.2 History of Microfinance .................................................................................................................... 19
2.2.1 Overview of Microfinance Institutions in Ethiopia ........................................................................ 20
2.2.2 Performance measurement in microfinance ............................................................................. 21
2.2.3 Role and Benefits of MFI in Strengthening Micro and Small Business ...................................... 22
2.2.4 Models of microfinance interventions ....................................................................................... 23
2.3 Challenges of Microfinance Institutions ........................................................................................... 24
2.3.1 Factors Affecting the Performance of MFIs ............................................................................... 25
2.4 Empirical Review ............................................................................................................................. 26
2.5 Conceptual Framework of the study ................................................................................................ 27

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CHAPTER THREE: RESEARCH METHODOLOGY ............................................................................................ 29
3.1. Description of the Study Area .......................................................................................................... 29
3.2 Research design ................................................................................................................................ 29
3.3 Types of Data, Source of data and Methods of Data collection ....................................................... 30
3.3.1 Method of data collection ......................................................................................................... 30
3.3 Sampling Techniques and Sampling Size Determination .................................................................. 31
3.3.1 Sampling Technique ................................................................................................................... 31
3.3.2. Sample Size Determination ....................................................................................................... 31
3.5. Method of data analysis................................................................................................................... 32
3.6 Dependent and Independent variable .............................................................................................. 33
4.TIME SCHEDULE .......................................................................................... Error! Bookmark not defined.
5. BUDGET ................................................................................................................................................... 36
6. References.............................................................................................................................................. 37

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List of Table

Table 1: Time schedule ................................................................................................................. 35

Table:2 Budget plan ...................................................................................................................... 36

a.

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 Abstract

This study explores and evaluates the efficiency of microfinance institutions (MFIs) in Daye
Town, Ethiopia, aiming to comprehend their impact on diminishing poverty and fostering
economic growth within the locality. Recognizing the crucial role of MFIs in empowering low-
income individuals and micro-enterprises, the examination critically assesses both operational
and financial aspects of their effectiveness. The review of literature carefully delineates the
historical evolution of microfinance, the substantial proliferation of MFIs across Ethiopia, and
the diverse range of service paradigms they deploy.

Emphasizing institutional efficiency, the investigation strives to pinpoint the principal

determinants influencing favorable outcomes and scrutinize performance patterns across time.
The research methodology adopts a mixed-methods approach integrating interviews,
questionnaires, and the utilization of secondary data, assisted by both probability and non-
probability sampling methodologies. The analysis will incorporate standard descriptive statistics
in conjunction with advanced econometric models, including the Heckman selection model, to
disentangle the impacts of institutional attributes, economic and financial variables, governance,
regulatory frameworks, macroeconomic circumstances, and socio-demographic elements on MFI
efficacy.

Anticipated outcomes embrace valuable insights into the mutual interaction between MFIs and
the socio-economic environment of Daye Town, illuminating obstacles to performance and
identifying thresholds for potential policy initiatives. The outcomes will chart a trajectory for
future research directions and offer a blueprint for stakeholders to elevate MFI contributions to
poverty alleviation and financial inclusivity. The endeavor is meticulously organized with a
transparent timeline and a budget that encompasses essential resources to ensure meticulous
fieldwork and robust data analysis.

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 CHAPTER ONE: INTRODUCTION
1.1. Background of the Study
The concept of microfinance originated in 1970, in Bangladesh through a pioneering
experiment by Dr. Muhammad Yunus, and then professor of economics (yunus, 1998). It is
the provision of financial service to those who excluded from conventional commercial
financial service. Since most are too poor to offer much or anything in the way of collateral.
It presents a series of exciting possibilities for extending market, reduces poverty,
strengthening small business and fostering social changes. (Aovery, 2001, Ayyagari et a l
2012) Researchers have viewed microfinance in different dimensions, for example, it gives
people new opportunities by helping them to get and secure finances to equalize the chances
and make them responsible for their own future. It broadens the horizons and thus plays both
economic and social roles by improving the living conditions of the people (as Chirkos
cited, Microfinance Radio Netherlands, 2010).

The current condition of Micro Financial Institutions across the world by region, East Asia
and Pacific (EAP), Latin America and the Caribbean (LAC), and sub-Saharan Africa (SSA)
has the most MFIs whose small business portfolios are increasing. By contrast, the small
business portfolios of MFIs in Europe and Central Asia (ECA) and South Asia (SA) seem to
be more stable (CGAP, 2011).

Micro-enterprises are business activities that are independently owned and operated; have a
small share of the market; managed by the owner; and employing five or less employees.
(This has recently been revised to include employment until 10 workers and capital reaching
up to 20,000 Birr), while small businesses are those enterprises that employ 6-49 employees.
They share the same characteristics with micro-enterprises in other aspects (Girmay, 2006)

According to Association of Ethiopian Microfinance Institutions (AEMFI) Microfinance,

industry was introduced in Ethiopia in 1980s when the government failed to deliver
subsidized credit to poor farmers. It designed to seek effective market-oriented solutions to
the provision of sustainable and effective financial services to low- and middle-income
group of people living in both rural and urban areas. During the emergence of this industry,

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most microfinance firms established to support the effort of poverty reduction by insuring
their operational and financial sustainability AEMFI (2008).

In Ethiopia, the poverty reduction strategy is becoming the operational framework to

translate the global MDGs targets in to national action (UNDP 2005). Micro finance service
intervention in Ethiopia have also been considered as one of the policy instruments of the
government and non-government organizations (NGOs) to enable rural and urban poor
increase output and productivity, induce technology adoption, improve input and
productivity, induce technology adoption, improve input supply, increase income, reduce
poverty and attain food security.

Micro finances established with the intension to help alleviate poverty. Yet, by bringing
these two concerns together, we might be mixing up two diverging ends: one is poverty
reduction; the other one the development of a healthy microfinance industry. If poverty
reduction is the prime objective, then microfinance is likely to be only one of several
instruments; in fact, it might turn; out to be of minor importance. If viable microfinance
institutions are our chief concern, they may benefit, and profit, from a variety of market
segments, which may or may not include the poor (Hans, 1999).

Microfinance institutions have evolved since the late 1990s as an economic development
tool intended to benefit low-income people. Bayeh (2012), points out that the goals of
microfinance institutions as development organizations are to service the financial needs of
un served or underserved markets. as a means of meeting development objectives such as to
create employment, reduce poverty, help existing business grow or diversify their activities,
empower women or other disadvantaged population groups, and encourage the development
of new business (Bayeh, 2012).

One of the most stylized facts of developing economies is that formal financial institutions
leave the poorest population tightly constrained in their access to financial services. It is also
widely recognized that economic progress relies largely on access to financial services such
as savings, insurance, and credit. Where formal financial institutions fail the large majority
of the poor population, there is evidence to support the proposition that microfinance
institutions & credit unions can fill some of the gap (Alemayehu, 2008).

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The sustainability of micro finance institutions that reach a large number of rural and urban
poor who are not served by the conventional financial institutions, such as the commercial
banks, has been a prime component of the new development strategy of Ethiopia (Wolday
2000) This paper tried to assess the financial and operational performance of MFIs. MFIs
must struggle to have good financial and operational performance so that they can play a
major role in the poverty reduction. MFIs have two challenges one of which is to become a
viable institution that built a firm foundation for efficient operation.

Microfinance institutions found among the institutions, which provide different financial
service for the poor who are out of the conventional banking system particularly in
developing countries. Microfinance Institutions (MFIs) provide financial services to poor
clients who in most cases have no access to formal financial institutions. During the last
three decades, microfinance has captured the interest of both academics and policy makers.
This is, among other things, due to the success of the industry (Assefa et al., 2013).
Since the first Proclamation of 1996 that gave the legal background for the operation of the
micro-financing business, the industry has witnessed a major boom. Today, there are 31
MFIs registered with the National Bank of Ethiopia serving clients. The Ethiopian
microfinance market dominated by a few large MFIs, all of which are linked to regional
state government ownership. The three largest institutions account for 65% of the market
share in terms of borrowing clients, and 74% by loan provision. These are Amhara (ACSI),
Dedebit (DECSI) and Oromia (OCSSCO) Credit and Savings Institutions (Ebisa et al.,
2013).
According to the Federal Micro and Small Enterprise Development Agency (FeMESDA), a
total of 70,455 new micro and small-scale enterprises established in 2011/12 employing
806,322 people. The total employment has grown by 23.8 percent, compared to a year ago.
The total amount of loan received from micro finance institutions was more than Birr 1.088
billion under the review period, 9.5 percent higher than last fiscal year. This shows that the
role of microfinance institution is significant in many aspects. The loan given by MFIs for
micro and small enterprises contributes for the acceleration of the development process of
the country. Based on the proclamation on microfinance business, micro finance institutions
can be engaged in accepting both voluntary and compulsory savings as well as demand and
time deposits.

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The diminishing of sources of funds pressures microfinance institutions (MFIs) into
commercialization of services that prioritize profit over social mission (Toindepi, 2016).
Commercialization focuses on profit, market, and competition rather than on social mission.
It prioritizes financial sustainability as the driver or sole objective of the MFI. MFIs that
chase profit have lower rates of outreach (Pedrini & Ferri, 2016). This research was
designed to identify the business models that best balance the financial sustainability and
social responsibilities of MFIs in Ethiopia.
Lending to the poor or lower income group raises many debates among practitioners and
academicians. The poor usually excluded from credit facilities because of many reasons.
These include insufficient collateral to support their loans, high transaction costs, unstable
income, lower literacy, and high monitoring costs (Norhaziah, 2010).
In Ethiopia, several micro finance institutions (MFIs) have established and have been
operating towards resolving the credit access problem of the poor particularly to those
participates in the petty business (Befekadu, 2007).
In addition to this micro finance business allowed to participate in extending credit to rural
and urban farmers and people engaged in other similar activities as well as micro and small-
scale rural and urban entrepreneurs. The proclamation gives the right to MFIs for drawing
and accepting drafts payable within Ethiopia, to participate in micro-insurance business. as
prescribed by directive to be issued by the National Bank, purchasing income-generating
financial instruments. Such as treasury, bills and other short-term instruments as the
National Bank may determine as appropriate, acquiring, maintaining, and transferring any
movable and immovable property including premises for carrying out its business.

1.2. Statement of the Problem

Micro finance institutions play a great role in supporting the economic activities of the rural
and urban poor in developing countries. Studies show that African MFIs are important
actors in the financial sector, and they are well positioned to grow and reach the millions of
potential clients who currently do not have access to mainstream financial services
(Lafourcade et al., 2005). Ebisa et al. (2013) found that microfinance institutions are
decisive way outs from the vicious circle of poverty particularly for the rural and urban

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poor, particularly in a country like Ethiopia where many people live barely below the
absolute poverty line.

The micro financing industry of Ethiopia is escalating in the face of the growing deep
concerns for inflation and low interest rate in the microfinance industry affecting the
financial health and viability of MFIs.
The establishment of sustainable MFI that reach a large number of rural and urban poor who
are not served by the conventional financial institutions, such as the commercial banks, has
been a prime component of the new development Strategy of Ethiopia (Wolday 2000) The
Ethiopian microfinance sector is one of the fastest growing in the world today.

In Ethiopia, microfinance services initially started operation with donor fund and as of
September 2012 there were 32 microfinance institutions serving around 2.9 million rural and
urban poor & low income people of Ethiopia. The institutions have been offering broad
range of financial services in the entire country. During this period, the MFIs had deposits of
Birr 5.3 billion in the type of compulsory and voluntary savings. In addition, total assets,
total outstanding loan, and total capital stood at Birr 13.7 billion, Birr 9.8 billion, and Birr
3.9 billion respectively (Biritu, 2012).

The formation of sustainable Microfinance Institutions (MFI) that can reach a large number
of poor people who are not served by the commercial banks has been the main tool of
poverty alleviation and the recent development strategy of Ethiopia. In Ethiopia, the poverty
reduction strategy is becoming the operational framework to translate the global Millennium
Development Goals (MDGs) targets in to national action (UNDP, 2005).

Microfinance leads to more education, better health, improved diet and nutrition, and greater
resilience to disasters for poor families. In addition, it lays a foundation that allows other
humanitarian intervention to be effective while providing the economic engine that allows
the transition from dependency to sustainability (Vision Fund Annual Report, 2008). As
indicated above MFI play pivotal role to take out the poor out of poverty. However, there
are still problems with regard to their financial and operational performances. Hence this
study will try to assess these problems and recommend sound policy recommendation.

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The objective of almost all of the micro fiancé institutions in Ethiopia is poverty alleviation.
To achieve this objective micro finance institutions should be financially viable and
sustainable. Despite the increasing reliance on micro finance to reduce poverty in Ethiopia
there has been surprisingly little work under taken to evaluate their performance. There is
also a fear among interested parties in the industry that MFIs could not stay in the market to
serve the poor without the immense support of government, donors, and others.
Limited access to financial services is among the major problems impeding rural livelihood
development (Hermes and Lensink 2007; Wijesiri et al. 2017). The problem is particularly
severe in developing countries, such as Ethiopia, mainly for two reasons. First, most of the
conventional banks in the country are concentrated in urban areas, while more than 80% of
the population is rural. Second, whenever available, the formal banking sector
systematically excludes the rural poor due to the higher screening, monitoring, and
enforcement costs of providing a small loan. Moreover, most poor have few or no assets that
can be secured by a bank as collateral (Shu and Oney 2014; Hermes and Lensink 2007; Cull
et al. 2011).

According to Amha and Narayana (2000), the Ethiopian MFIs have many problems related
with the regulatory framework in the microfinance industry. Limited support to micro and
small enterprise development. the activities of NGOs on providing credit as a grant, absence
of solid linkages between MFIs and Commercial Banks, lack of fund for loans and an
institution to establish microfinance fund and access to soft loans from NGOs. very limited
research and innovation in the microfinance industry and other problems also identified on
his research findings. The finding of this research was more general and the case of MFIs in
Daye town was not indicated specifically in this research. In addition to this, the findings are
outdated. Within this twelve-year period, there may be many policy changes and the
situation might be changed.
Thus, the purpose of this project will be to analyze the performance MFIs. So far, most
research tried to assess the impact of microfinance on poverty, women empowerment,
income generation, agricultural productivity, etc. However, the paper will try to assess
whether the MFIs are financially and operationally sound or not.

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1.3. Objective of the study

1.3.1. General objective of the study

The general objective of the study will be to analyze performance of micro finance
institutions in Daye Town.

1.3.2. Specific objectives of the study

✓ To assess the financial and operational performance of micro finance institutions in
Daye town
✓ To identify the rationales behind the success and failure of MFIs
✓ To assess the trend of performance of microfinance institutions
✓ To identify major factors that affect the performance of MFIs

1.4. Research question

The main research questions will be-
✓ What are the indicators of the financial and operational performances?.
✓ What are the rationales behind the success and failure of MFIs?
✓ What are the trends of performance of microfinance institutions in the study area?
✓ What are the major factors, which affect the performance of MFIs?

1.5. Significance of the study

This paper will be provided know how about the performance of MFIs on its outreach and
sustainability tradeoffs. It will also trigger further studies, which may motivate many
researchers to conduct comprehensive research in relation to performance of micro finance.
Besides, the findings may serve as a reference for other researchers interested on the subject.
What is more is this paper will also provide information to help policy and decision makers
to design and implement programs that contribute towards the improvement of MFIs
performance in Daye town and other areas. This research project will be believed to be
significant in improving the operation of MFIs by clearly indicating the performances of the
institutions. The performance indicators will show the position of each MFI, thereby helping
them to improve their performances. This is to say that the aim of this assessment will be to
assist microfinance practitioners in measuring the financial and operational performances of

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MFIs and, consequently, to give some insights into how a MFIs' financial and operational
performances could be improved.

1.6 Scope and Limitation of the study

This research will be conducted in Daye Town. It focuses on performance of micro finance
institutions. This research will face with some constraints or difficulties, lack of appropriate
data, informational constraint, lack of enough time and budget may also have an influence
on the process and result of the study.

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 CHAPTER TWO: LITERATURE REVIEW

2.1 Theoretical Reviews

2.1.1 Basic Concepts and Definitions

The definitions of microfinance institutions proposed by some scholars and organizations

are seemingly different from one another. However, the essence of the definitions is usually
the same.

Micro-Finance Institutions (MFIs) are often defined in terms of characteristics like

Targeting the poor (especially the poor women), promoting small businesses, building
capacity of the poor, extending small loans without collaterals, combining credit with
Savings and charging commercial interest rates. MFIs are often innovative and flexible in
their design and implementation (Alemayehu, 2008).

MFI is a type of financial institution that offers financial service to the low-income peoples,
unemployed or group of peoples who have no access to financial services of commercial
banks. It is a modern tool that is used almost everywhere to fight poverty, make awareness
and empower women that results in sustainable development (Perways A., and P. Krishna
M., 2017). Microfinance’ history is often related to the introduction of non-governmentally
owned institutions that provide the service of micro-credit to the active poor community.
Standards started to rise calling stronger financial management to the providers of small
credits in the early 1990s particularly in their behavior of reporting and management. Credit
unions and formal financial institutions like banks involved stronger monitoring techniques
of micro lending for their microcredit jobs (Ledgerwood, 1998).

Microfinance plays a critical role in alleviating poverty and brings economic de- M. Z.
Shifa, L. P. Fuller DOI: 10.4236/me.2022.1310068 1271 Modern Economy velopment to
economically excluded low-income groups in rural and urban areas. The modern form of
microfinance was started in the early 1980s by Muhammad Yunus, from Bangladesh
(Schmidt, 2018). Microfinance service intervention through micro loans, micro saving,
training in financial literacy, and business development for these groups demonstrates that
they are bankable and trustworthy to repay loans on time and in full.

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Microfinance policy and objectives in Ethiopia are to make available and accessible
financial services to a large number of actively productive Ethiopian populations which use
to have no access to formal financial services that could empower them the contribution of
the country’s economic development. Microfinance is related to a group of financial service
innovations under the term microfinance, according to microfinance it is micro savings,
money transfer and micro insurance (Islam, Mohd. Najmul, 2013).

Micro-Finance Institutions (MFIs) are often defined in terms of characteristics like

Targeting the poor (especially the poor women), promoting small businesses, building
capacity of the poor, extending small loans without collaterals, combining credit with
Savings and charging commercial interest rates. MFIs are often innovative and flexible in
their design and implementation (Alemayehu, 2008).

MFIs have empowered the poor to get out of poverty and cyclical deprivation to live with
dignity and respect (Bos & Millone, 2015; Chib, 2016). The MFI should consider its
external social and business environment. According to institutional theory, an institution
forms its processes and structure through social interaction, norms, and values, all of which
are predominantly subjective (Nebojsa, 2015). The MFI should not be responsive only to its
internal efficiencies and economic rationale. As a member of society, the MFI should
manifest its social responsibility as a main line of objective, not as an incidental or side
issue.

MFIs have helped to reduce poverty, improve purchasing power, and cover essential health
and education costs of low-income groups and their families (Chib, 2016). MFIs are used as
a policy development tool to reduce poverty (Georgios, 2019).

Microfinance is the provision of small-scale financial services to low income or unbanked

people. It is about provision of “a broad range of financial services such as deposits, loans,
payment services, money transfers and insurance to the poor and low income households
and their farm or non-farm micro-enterprises” (Bayeh,2012).

According to Meagher (2002), microfinance is defined as ‘lending small amounts of money

for short periods with frequent repayments. However, this definition equates the concept

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with micro-credit, which is rather a part of microfinance service. microfinance is banking
the un bankable, bringing credit, savings and other essential financial services within the
reach of millions of people who are too poor to be served by regular banks, in most cases
because they are unable to offer sufficient collateral (Kassa,2008).

Microcredit or known as micro lending is defined as an extremely small loan as small as

RM100 given to improve rushed people to help them become self-employed. Microcredit
was given to the poor individuals for income-generating activities that will improve the
borrower’s living standard. The loans characteristics are, too small, short-term credit (a year
or less), no collateral, required weekly repayment, poor borrower and mostly women who
are not qualified for a conventional bank loan (Norhaziah, 2010). It is rightly qualified to be
a most important instrument to lead poor people out of the vicious circle of poverty
(Baburam, 2010).

Microfinance must maintain financial sustainability and provide socially responsible and
affordable financial services to lower-income groups in rural and urban areas. There is a
trade-off between financial and social orientation, mostly related to the transaction cost of
lending to low-income and marginalized groups (Bos & Millone, 2015). MFIs are expected
to balance financial sustainability and social responsibility to provide a financially
sustainable service without compromising the economic development mission.

Microfinance is the supply of loans, savings, money transfers, insurance, and other financial
services to low-income people. Microfinance institutions (MFIs) —which encompass a wide
range of providers that vary in legal structure, mission, and methodology offer these
financial services to clients who do not have access to mainstream banks or other formal
financial service providers (Lafourcade et al., 2005). Similarly, Parker et al., (2000) defines
microfinance as provision of small loans (called “micro-credit”) or savings services for
people excluded from the formal banking system.

Microfinance is a type of banking service, which provides access to financial and non-
financial services to low income or unemployed people. Microfinance is a powerful tool to
self-empower the poor people especially women at world level and especially in developing
countries (Noreen, 2011). While Steel and Addah (2004) describe micro finance as small

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financial transactions with low income household and micro enterprises, using nonstandard
methodologies such as character-based lending, group guarantees and short term loans.
According to Linda (2001), Microfinance is the means by which poor people convert small
sums of money into large lump sums. Micro finance services may be seen in terms of four
main mechanisms:
➢ Loans: which allow a lump sum to be enjoyed now in exchange for a series of savings
to be made in the future in the form of repayment instilments?
➢ Savings: which allow a lump sum to be enjoyed in future in exchange for a series of
savings made now?
➢ Insurance: which allows a lump sum to be received at some unspecified future time if
needed in exchange for a series of savings made both now and in the future. Insurance
also involves income pooling in order to spread risk between individuals on the
assumption that not all those who contribute will necessarily receive the equivalent of
their contribution.
➢ Pensions: which allow a lump sum to be enjoyed as a specified and generally distant
date in future in exchange for a series of savings made now.

2.2 History of Microfinance

Bornstein (1996) cited in (Zeller and Meyer, 2002) stated that Professor Mohammad Yunus,
a Bangladesh, addressed the banking problem faced by poor villagers in southern
Bangladesh through a program of action research. With his graduate students at Chittagong
University, he designed an experimental credit program to serve the villagers. The program
spread rapidly to hundreds of villages. Through a special experimental relationship with
local commercial banks, he disbursed and recovered thousands of loans, but the bankers
refused to take over the project at the end of the pilot phase. They feared it was too
expensive and risky in spite of its success (Zeller and Meyer, 2002). When we see the
condition of most microfinance clients, giving loans for them seems risky. Because getting
the money back from the borrower needs special follow up and the absence of collateral for
lending aggravate the fear.

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2.2.1 Overview of Microfinance Institutions in Ethiopia
The development of microfinance institutions in Ethiopia is a recent phenomenon. The
proclamation, which provides for the establishment of microfinance institutions, was issued
in July 1996. Since then, various microfinance institutions have legally registered and
started delivering microfinance services (Wolday, 2000). The number of micro finance
institutions as well as the number of clients is increasing from time to time. The existing
political and economic condition of the country contributes a lot for the development of the
microfinance industry. According to Getaneh (2005), the Licensing and Supervision of
Microfinance Institution Proclamation of the government encouraged the spread of
Microfinance Institutions (MFIs) in both rural and urban areas. as it authorized them,
among other things, to legally accept deposits from the public (hence diversify sources of
funds), to draw and accept drafts, and to manage funds for the micro financing business. In
this case, some MFIs have strong capacity to serve a large number of clients by using their
financial and geographical advantage. These three institutions take more than 50% of the
market share. This means they are reaching and serving many poor in their areas.
The Ethiopian deposit-taking MFIs provide different financial services such as; savings,
micro insurance, loan, remittance, and payment such as collecting taxes, pension payment,
and another related service charge. Consequently, a progressive transition has been seen in
Ethiopian MFIs from microcredit to microfinance and finally to financial inclusion (Wolday
and Anteneh, 2015).

The Ethiopian five-year growth and transformation plan (GTP) and the micro and small
enterprise development agency (MSEDA) strategy has given more emphasis on the saving
behavior of household and saving mobilization and this is why all MFIs in Ethiopia offer
both compulsory and voluntary savings. The financial performance of this sector shown a
remarkable achievements and the sector outreach is impressive, according to AEMFI’s 2016
annual report, the Ethiopian MFIs has shown a remarkable progress in terms of outreach and
performance, the sector outreach or the number of active borrowers is 3.9 million in which
out of these borrowers 1.7 million were women.

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2.2.2 Performance measurement in microfinance

Microfinance institutions, regardless of their social mission, are financial intermediaries.

Therefore, it is important to assess the viability and soundness of MFIs. To evaluate the
performance of micro finance institutions SEEP Network and CGAP (most widely used)
evaluate financial and operational performance in-terms of

✓ Sustainability and Profitability

✓ Asset and Liability Management
✓ Portfolio Quality
✓ Efficiency and Productivity

The financial performance indicators are usually ratios extracted from the financial reports
(Balance Sheet, Income Statement and Portfolio Report).but due to lack of information on
portfolio report performance against portfolio quality were not made.

1. Sustainability and Profitability

Tend to summarize performance in all areas of the company and its sustainability
.Most widely indicators of Sustainability and Profitability includes: Adjusted return
on equity , Adjusted return on assets , Operational self-sufficiency & Financial self-
sufficiency
2. Assets/Liability Management

This includes the following performances indicators: portfolio to assets, adjusted cost of
funds ratio, adjusted debt to equity, and liquidity ratio.

3. Portfolio Quality

The most widely used measure of portfolio quality in the microfinance industry includes:
Portfolio at Risk, Write-off ratio, & Risk cove-rage ratio

4. Efficiency/Productivity

Efficiency and productivity indicators are performance measures that show how well the
institution is streamlining its operations. Productivity indicators reflect the amount of output
per unit of input. These indicators reflect how efficiently an MFI is using its resources,
particularly its assets, and its Personnel. The Most common efficiency and productivity

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indicators includes: Personnel productivity, Average Outstanding Loan Size, Operating
expense ratio &Cost per borrower

2.2.3 Role and Benefits of MFI in Strengthening Micro and Small Business
Micro finance is the chance the poor never had. It provides credits and savings services to
the Self-employed to enable them to start-up or expand small income generating activities.
The typical micro finance clients are low-income persons that do not have access to formal
financial institutions.

Micro-Finance clients are typically employed, often household based entrepreneurs. In rural
areas, they are usually small farmers and others who are engaged in small income generating
activities such as food, pity trades, and the like. The formal financial institutions have played
little role in financing development efforts in the rural area because they are clustered in
conglomerations, concentrate on funding large enterprise, inaccessible to the rural poor
especially in terms of distance. There for countries like Ethiopia in which more than 80% of
the total population resides In rural areas and based mainly on subsistence agriculture for
their livelihood microfinance play a crucial role by improving productivity through access to
resource that will bring a multiplier effect on economic and social development in a broad
scene (Alemayehu, 2008).

Formal micro finance in Ethiopia, through recent phenomena, has encouraging acceptance
both by government development NGOs working towards poverty alleviation in the country.
The regulatory framework for MFIs to operate and expand their services in both rural and
urban areas of the country. As one of positive aspects, the regulatory frameworks allow
licensed MFIs to accept deposits from the public and able to finance significant portion of
their lending business.( Ebisa e ta l ,2013).

According to (Wolday Amha (2007a) in 2007 there are about 27 licensed MFIs in the
country covering about 1.37 million active borrowers and 2.7 million borrowers. The
operational and financial sustainability are also reports to be progress in recent years. As of
Dec 2006 about thirteen MFIs are operationally sustainable (arise from six in 2003), and
eight (up from only two in 2003) were financial sustainable. Through these achievement are
very impressive give the short period of operations of micro financial institution (not more

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than ten years for most) the hung unmet demand existing in the country of micro finance
sector in the country entails in the presence of gaps performance of micro finance sector in
the country.

According to him is observed that 27 MFIs have been able to meet less than 20% of the
demand for micro finance services of the active poor in the country, but now the numbers
are reached more than 31. Oromia credit and saving institution (OCSI) is one of the large
micro finance institutions operating in Ethiopia. Its micro finance market is for low-income
population of the Oromia region. It has started its operation in 1995. Its primary objective is
to improve the economic situation of low-income productive poor people in Oromia region
especially through increased access to lending and saving services. OCSI has achieved
remarkable performance in its micro finance activities. Its lending activates has witnessed
positive socio-economic impact up on its client’s through helping the poor increase their
income; asset position and empowerment. There are now more than 590,000 borrowers and
more than one billion outstanding loan portfolios, covering more than 35% of the national
outreach( Ebisa e ta l ,2013).

2.2.4 Models of microfinance interventions

Despite the lack of date on the sector, it is clear that wide varieties of implementation
methods are employed by different MFIs. The Grameen Bank (2000) has identified fourteen
different microfinance models of which I will focus on three: Rotating savings and credit
Association (ROSCAs), the Grameen Bank and the Village Banking modes, are the three
microfinance models that are common in the industry.
A. Rotating Savings and Credit Associations

These are formed when a group of people come together to make regular cyclical
contributions to a common fund, which is then given as a lump sum to one member of the
group in each cycle (Grameen Bank, 2000). This model is a very common form of savings
and credit. He states that the members of the group are usually neighbors and friends, and
the groups provides an opportunity for social interaction and are very popular with women.
(Eoin Wrenn, 2005)
B. The Grameen Solidarity Group Model

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This model is based on group peer pressure where by loans are make to individuals in
groups for four to seven. Group members collectively guarantee loan repayment, and access
to subsequent loans is dependent on successful repayment by all group members. This
model has contributed to broader social benefits because of the mutual trust arrangement at
the heart of the group guarantee system. The group itself often becomes the building block
to abroader social network (Eoin Wrenn, 2005)

C. Village Banking Model

Village banks are community-managed credit and savings associations established by NGOs
to provide access to financial services, build community self-help groups and help members
accumulate savings. They usually have 25 to 50 members who are low-income individuals
seeking to improve their lives through self-employment activities.
These members run the bank, elect their own officers, establish their own by-laws, distribute
loans to individuals, and collect payments and services (Grameen Bank, 2000a). The loans
are backed by moral collateral; the promise that the group stands behind each loan. The
sponsoring MFI lends loan capital to the village bank, who in turn lend to the members. All
members sign a loan agreement with the village bank to offer a collective guarantee.
Members are usually requested to save twenty percent of the loan amount per cycle.
Members' savings are tied to loan amounts, are used to the loan amount, and are used to
finance new loans or collective income generating activities and so they stay within.

2.3 Challenges of Microfinance Institutions

Most microfinance programs are small and vulnerable to resource constraints. Most operate
in a few locations and serve specific clusters of clients, so they are exposed to the systematic
risks of undiversified loan portfolios. Most mobilize few savings and not financially self-
sufficient, so they are dependent on the whims of donors and government for their future
existence (MEYER, 2002). Microfinance institutions may face financial problems, which
affect their performance. When the customer of the institutions increases the required money
for loan disbursement, also increase. On the other hand, when the operational areas of the
institutions is limited (less outreach), it is difficult to be profitable.

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2.3.1 Factors Affecting the Performance of MFIs
Huang (2005) cited in (Vanroose, 2008) distinguishes three groups of factors: policy,
geographical and institutional factors.
Policy Factors: There are different macro-economic factors related to MFIs. The first factor
is the income level. Westley (2005) cited in (Vanroose, 2008) states that regions with higher
levels of income have less developed microfinance sectors. He provides two reasons. Firstly,
micro-entrepreneurs with higher incomes have more opportunities to self-finance through
savings. Secondly, they may benefit more easily from informal finance through family and
friends, as well as from formal finance.
Geographic Variables: Stieglitz and Weiss (1981) cited in (Vanroose, 2008) stated that
transaction and information costs influence financial development. In some cases, they lead
to market failures. Good interconnectivity between regions, the availability of electricity,
communications, and sanitation networks lower these costs. A high population density also
helps. According to Sriram and Kumar (2005) cited in (Vanroose, 2008) two contradictory
arguments could be made. The first is that formal financial institutions may be more
developed in regions with higher population density and good regional interconnectivity.
Thus, the need for specific MFIs may not be present. The second is that, if the development
of the two sectors is complementary, these factors could eventually also stimulate the
development of the microfinance sector. Hulme and Moore (2006) cited in (Vanroose, 2008)
also support the hypothesis that microfinance tends to develop much faster in densely
populated areas.

Institutional Variables: Institutions play an important role in the development process of a

country. One institution that is often mentioned in the microfinance literature is the
educational system. The role of human capital in financial sector development is widely
recognized (Vanroose, 2008). Paulson (2002) cited in (Vanroose, 2008) finds that regions
with higher levels of education have more developed financial systems. Guiso et al (2004)
cited in (Vanroose, 2008) also find positive effects of social capital in financial sectors.

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2.4 Empirical Review

Many studies were conducted on the issue related to microfinance institutions performance,
challenges their impact on the economic and social condition of the rural poor.

The study conducted by Ebisa et al., (2012), shows that the mean amount of loans extended
by 30 microfinance institutions in the country is 2.2938, whereas the mean borrowing
customers equal an amount of 8.2434. As it is indicated in this study the R square value is
0.913 implying that 91.3% of the variations in the amount of loans extended by 30
microfinance institutions in the country are explained by the number of borrowing clients.
On the other hand, the Pearson correlation indicates strong positive linear relationships
between number of borrowing clients and amount of loans extended. The total number of
active borrowing clients of the microfinance institutions in Ethiopia reached over 2.4 million
customers in 2011 whereas the total credit extended by all microfinance institutions
amounted to Birr 6.9 billion. Of the total credit granted, the share of the three largest
Microfinance institutions is Birr 5.1 billion. The market shares based on the number of
borrowing clients are 28.1, 16.1, and 20.4% for Amhara Credit and Saving Inst (ACSI),
Dedebit Credit and Savings Inst (DECSI) and Oromia Credit and Savings (OCSSCO),
respectively.

Lack of skilled personnel is the common problem in Ethiopian Microfinance Institutions.

This situation is more exacerbated by high turnover of experienced personnel either for the
need for better jobs or hate to work in rural areas with minimal facilities provided as
compared to urban areas, which offer better living conditions. There is also a problem of
using modern core finance technologies for many of MFIs specially those microfinance
institutions operating in remote rural areas having poor infrastructure development. As a
result, there are problems of non-standardized reporting and performance monitoring
system. On the other hand, MFIs face challenges of obtaining loans in the existing financial
market, particularly from banks, which hampers strive for addressing various needs of
clients. There is an illegal way of doing the micro financing business from the side of the
government, NGOs, and other agencies, which continue to provide uncollectible loans by
violating the proclamations ratified by the House of People’s Representatives. Apart from

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this, there are deep concerns within the microfinance sector about the growing issue of
inflation on the profitability of MFIs, and the ability to maintain low interest rates (Ebisa et
al., 2013)

2.5 Conceptual Framework of the study

The performance of microfinance institutions can be affected by different internal and
external factors. Studies indicated the success or failure of the institutions directly or
indirectly related to different factors. Institutional, social, economic, as well as
environmental factors play a great role on the performance of the institutions. Institutional
factors related to the financial capacity, the capacity of the institutions to serve their clients,
the use of different cost effective and efficient technologies in the institution and other
related issues. Social factors on the other hand are related to the conditions of the clients.
Social factors include the tradition, saving habit of the people, the existence of other means
for borrowing in the community and so on. In addition to this, environmental factors such as
geographical location of the clients, availability of infrastructure, and others contribute for
the performance of the MFIs. Economic factors also have a significant effect on the
performance of microfinance institutions. For instance, the economic level of the country in
which MFIs are operating is directly related to the outreach of the institutions and their
sustainability. The following diagram shows the relationship between the factors and
performance of MFIs.

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 Institutional
Factors related to
factors
clients

Poor Financial
Literacy Skill and
experience of HR
Financial factors Policy related
Saving factor Loan
Credit Performance of
microfinance provision policy
Loan repayment
institutions

Economic Political
factors factors

Figure 1: conceptual framework of study

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 CHAPTER THREE: RESEARCH METHODOLOGY

3.1. Description of the Study Area

Bensa is one of the woredas in Eastern sidama zone in a Sidama Region of Ethiopian. It
extends into the Oromia Region like a peninsula; Bensa is bordered on the south and north
by the Oromia Region, with Bona Zuria on the west, Arbegona on the northwest, Chere on
the east, and Aroresa on the southeast. Bensa is located at 415 km south of Addis Ababa and
125 km south of Regional city of Hawassa. Bensa Woreda is located at altitude which
ranges from 1452 to 3129 m above sea level. The average annual rainfall of the area is
1208.5 mm. The average annual temperature of the Woreda is 19°C. The Woreda has three
major agro ecologies, with 50% were moist weyna dega (mid-altitude), 36% moist dega
(highland) and 14% moist kola (lowland) (Bensa woreda pilot Learning Site diagnosis and
program design, LIVES, 2012). Sidamo is spoken as a first language by 97.64% of the
inhabitants, 1.46% speak Amharic, and 0.77% Oromiffa; the remaining 0.13% spoke all
other primary languages reported. The total population of the study area is estimated to be
342,545 (Bensa Woreda Administration office, 2018). For my cases I will focus on
microfinance institution in Daye Town. In Daye Town there are 2 (two) MFIs. Namely,
Omo MFIs, which found in 02 kebele and Sidama MFIs Daye town has 5 kebeles with
estimated population of the wereda 342,545 (Bensa Woreda Administration office, 2018).

3.2 Research design

This study will employ a descriptive research design to show the opinion of the managers
in Microfinance Institutions, the employees, and their clients to assess the factors that will
affect the performance of microfinance institutions. To this end, the researchers will use
both qualitative and quantitative approaches. Furthermore, in this study, a qualitative
research approach will be used to assess the opinion of the respondents towards the factors,
their assumptions, and the problems they face. A quantitative approach will be used to
indicate the frequency and percentage of the responses and to present different secondary
data in an organized way.

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3.3 Types of Data, Source of data and Methods of Data collection
Both qualitative and quantitative data will be collected from different data sources. The
study will be used both primary and secondary data sources. The primary data will be
collected with interview and semi structured questionnaire; which helps me in gathering
relevant information on the study area, to obtain the desired qualitative and quantitative data
and to identify my study issues. The secondary data will be from different source of
document of the microfinance institution that exists in the study area. In addition, sale and
market reports of journals, finance and statistics offices, and government publications of the
town will be used as secondary sources.

3.3.1 Method of data collection

To examine the performance of MFIs both primary and secondary data will be utilized. The
nature of data that will be needed for the study are quantitative and qualitative. The primary
data will be collected by observation, personal interview, semi structured interview schedule
and focused group discussion. To gather information from the respondents of the selected
sample, the researchers will develop a questionnaire containing open and closed-ended
questions. The questionnaires will be distributed and filled with the support of enumerators.
The questionnaires will be prepared in English language and will be translated into Amharic
to make the questionnaire simple for the respondents.

The secondary data will be collected by reviewing the relevant reference material such as
documents of the MFIS, research document, internet, books, office and other relevant
sources. Three types of questionnaires will be distributed in Dec 2016, for three target
groups of the research. Two of the questionnaires will be used to collect data from clients of
MFIs and employees of the institutions. The third questionnaire will be filled out by
operation managers of the institutions. In addition, the researchers will conduct interviews
with managers of the microfinance institutions to seek in-depth information about the factors
and challenges, which affect the performance of MFIs.

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3.3 Sampling Techniques and Sampling Size Determination

3.3.1 Sampling Technique

For the purpose of this study, the researchers will use both probability and non-probability
sampling techniques. There are two MFIs in Daye town, namely Omo Microfinance, and Sidama
Microfinance, which will be included in the sample. The researchers will decide to take 50% of
the branches to obtain adequate data.

There are approximately 20 employees in the selected two institutions, Out of these employees,
16 are operational workers who have direct linkage with the day-to-day activities of the
institutions. The researchers will employ the simple random sampling method to select the
sample from this population. The researchers will use purposive sampling (expert sampling) to
include all managers in the sample because they believe that managers of the institutions are the
main sources of the required information.

Regarding the clients, there are about 3900 clients in the selected institutions. Due to the
availability of a client list from each institution, the researchers will employ the systematic
sampling technique to select 363 clients. Consequently, 173 clients from Omo MFI, and 190
clients from Sidama MFI, will be selected.

3.3.2. Sample Size Determination

The sampling frame will be the list of all elements from which the sample will be drawn.
For this research, the sampling frame will be the list of microfinance institutions operating in
Daye town, the list of employees working in these institutions obtained from each
institution, and the list of clients of the institutions. The set of sampling units considered for
this study will include microfinance institutions found in Daye town, their clients, and the
workers of the institutions.

In Daye Town, there are currently only two microfinance institutions. In order to compare
different factors found in these different institutions, both of the institutions will be included
in the sample. The researchers will employ a formula to calculate the minimum size required
out of the targeted 16 workers in the institution. Israel (2009) has developed a formula for
determining sample size when the population size is known, and the researchers will utilize

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this formula. With consideration for the homogeneity of the respondents, and to reduce the
sample size, the researchers will apply a 5% precision level in the formula.
n = N/1+N (e) ²
n= 16/1+16(0.05)², 16/1.04=15
Thus, the employees included in the survey questionnaire will be 15. The number of
respondents taken from each institution will be determined by considering the total number
of employees in the institutions. Besides, 2 individuals (managers) will be selected for
interview purposively to support the purpose of this research. Similarly, in order to decide
the number of clients to be included in the sample, the researchers will employ the formula
method. As a result, from Omo Microfinance and Sidama microfinance institution, Daye
branches, they are about 1800 and 2100 clients respectively. In total, 3900 clients will be
taken as the total population from the selected institutions.
n= N/1+N (e) ² 3900/1+3900(0.05)²= 363

Because of the above calculation, 363 clients will be included in the sample. As the case of
employees, 5% precision is taken to determine the client sample size.

3.5. Method of data analysis

For quantitative data descriptive statistics like range, mean, deviation, desperation and
others will be employed to analyze efficiency, sustainability and outreach of micro finance
by using Statistical Package for Social Sciences (SPSS) as a tool for generating tabulated
reports and charts. Common and important Econometric models, and correlation will be
applied to determine and predict the current quantitative findings and their effects on micro
finance institutions respectively my cases the econometrics model that can be a good to fit
for studying the performance of microfinance institution is heck-man selection model. Due
to the non-random selection of microfinance institution, I will employ this econometrics
model to address such bias and provide consistent estimates. In analyzing the data, both
statistical and econometric methods that will fit the data will be employed. For qualitative
data analysis methods like concept explanation, elaborations of respondent’s feedback will
be used.

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3.6 Dependent and Independent variable
In the context of analyzing the performance of microfinance institutions, the selection of
dependent and independent variables is crucial for understanding the factors that influence
or determine the performance of these institutions.

Dependent variable:

The dependent variable is the primary focus of the performance analysis of microfinance
institution. In the context of microfinance institution performance, the dependent variable
often represents the outcome or the performance metric that researchers are interested in
understanding, explaining, or predicting.
Independent Variables:

Independent variables are the factors that are hypothesized to have an influence on, or to be
associated with, the dependent variable. In the context of microfinance institution
performance, a wide range of independent variables can be considered to understand their
impact on different aspects of performance. These may include:

1. Institutional Characteristics:
Age of the institution, Size of the institution. (Total assets, number of clients, etc.), Legal
status (NGO, bank-affiliated, etc.)
2. Economic and Financial Factors:
- Interest rates
- Inflation rates
- Exchange rates
- Funding structure (e.g., grants, loans, savings)
3. Operational and Governance Factors:
- Operational efficiency
- Governance and management quality
- Presence of risk management systems
4. Regulatory and Policy Variables:
- Regulatory environment
- Government policies and influence

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5. Macroeconomic conditions:
- GDP growth
- Unemployment rates
- Income levels in the target market
6. Social and demographic factors:
- Gender diversity
- Literacy rates
- Poverty levels in the target region

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 4.TIME SCHEDULE
I will perform all of my tasks within a given time schedule in order to be efficient and
effective. This time schedule shows the tasks and the time in which each stage of the
research is going to be conducted within a given or limited time. I will do according to the
schedule if all condition such as money, transport etc. are full filled as much as possible for
me. It is shown in the following table

Table 1: Time schedule

No Activities Duration
1 Questionnaire design December

2 Pretesting and correcting Questioners December

3 First round Primary and secondary data collection January

4 First round data processing and analysis January

5 First phase research writing February

6 Submission of first phase research to advisors February

7 Second round primary data collection February

8 Second round data processing and analysis March

9 Comparing first and second round result March

10 Rewrite the research May

11 Submission of research to advisor May

12 Final correction and printing the research June

13 Senior research presentation June

14 Final research paper submission June

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 5. BUDGET
The budget plan shows the total cost or expense that is going to be full filled for the purpose
of equation of materials that are necessary for this research project while conducting
research activity.

Table:2 Budget plan

N Description Days Quantity Unit cost Total

o

1 Transportation cost 5 5 25

2 Stationary

Paper 23 2.5 57.5

Pen 2 25 50

Pencil 0 0 0

CD-RW 2 30 60birr

Total 27 57.5 167.5

3 Typing cost for ?? 5 140

proposal writing

4 Typing cost for ?? ?? ??

research writing

Total 332.5

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 6. References

AMHA, W. & NARAYANA, P. (2000). Review of Microfinance Industry in

Ethiopia: Regulatory Framework and Performance, AEMFI.
ASSEFA, E., HERMES, N. & MEESTERS, A. ( 2013). Competition and the
performance of microfinance institutions. Applied Financial Economics,
23, 767-782.
CHAKRABARTY, S. & BASS, A. E. (2013). Encouraging Entrepreneurship:
Microfinance, knowledge, support, and the costs of operating in
institutional voids. Thunderbird International Business Review, 55, 545-
562.
DASGUPTA, R. (2005). Microfinance in India: Empirical evidence, alternative
models and policy imperatives. Economic and Political Weekly, 1229-
1237.
DERBAN, W. K., BINNER, J. M. & MULLINEUX, A. (2005). Loan repayment
performance in community development finance institutions in the UK.
Small Business Economics, 25, 319-332.
EBISA DERIBIE, GETACHEW NIGUSSIE & MITIKU, F. (2013). Filling the
breach: Microfinance. Jimma University, Ethiopia.
ETHIOPIA, N. B. O. ( 2012). 2011/12 Annual report. Addis Abeba: National Bank
of Ethiopia
FERNANDO, N. A. (2006). Understanding and dealing with high interest rates on
microcredit. Asian Development Bank.
GODQUIN, M. (2002). Objective repayment rates in Bangladesh and their
determinants: How to improve the efficiency of the attribution of loans by
MFIs?
HASSAN, M. (2002). The microfinance revolution and the Grameen Bank experience in

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Bangladesh. Financial Markets, Institutions & Instruments,
11, 205-265.
HERMES, N. & LENSINK, R. (2007). Impact of microfinance: a critical survey.
Economic and Political Weekly, 462-4

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