Outreach and financial performance analysis of microfinance institutions in Ethiopia

Abstract

Ethiopia is one of the least developed countries. The per capita income of the country, though it showed improvement in recent years, is only USD 180 as at end of 2005/06. Most of the poor, which mainly argued to be constrained by absences of credit access, participant in some kind of informal sector ranging from small petty trading to medium scale enterprises. Several micro finance institutions (MFIs) have established2 and have been operating towards resolving the credit access problem of the poor. In light of this, this paper attempted to look at MFIs performance in the country from outreach and financial sustainability angles using data obtained from primary and secondary sources. The study finds that the industry's outreach rise in the period from 2003 to 2007 on average by 22. 9 percent. It identified that while MFIs reach the very poor, their reach to the disadvantages particularly to women is limited (38.4 Percent).