Social and Financial Performance of Microfinance Institutions

Nzongang, Joseph; Nishimikijimana, Eloge

doi:10.1057/9781137034915.0014

Cited by 2 publications

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“…This work used only time as a factor of recovery. Nzongang and al., (2010) in the determinants of loan delinquency in urban MFIs: the case of MUFFA (Financial Cooperative of African Women) in Cameroon elaborated the factors that determine loan delinquency in MFIs. This work only looked at customers, and ignored the fact that loan default could also generate from the loan officers themselves due to poor management of information, over confidence in the customer's information.…”

Section: Literature Review and Research Questionsmentioning

confidence: 99%

Credit Management as a Predictor to the Sustainability of Microfinance Institutions

TENENG,

KEHDINGA

2023

J.o A.F.

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Purpose: This study was carried out to understand the relationship between credit management and the financial performance of Micro Finance Institutions, taking a sample of 43 MFIs administrators in the towns of Dschang, Mbouda and Bafoussam of Cameron. Method: The study applied a quantitative research design, where questionnaires were used. Data was collected from both primary and secondary sources. Data was processed and analyzed using formal tables, pie charts, multiple linear regressions, and Anova, chi-squared, Cronbash’s Alpha, Pearson tests were carried out to understand the relationship between credit management and financial performance Microfinance Institution in Cameroon. A total of 43 respondents were considered out of the entire population. Findings: Findings indicate that credit policies, debt recovery technique mechanisms are significant and positively related to the portfolio quality of MFIs in Cameroon. More specifically, good lending policies such as proper study of the loan documents, group liability, monitoring repayment frequency would increase financial performance. In addition, recovery techniques such as constant customer reminder, prolonging recovery period, penalties etc, enabled MFIs to perform financially well. Originality value: This study explores and shed light on an important factor responsible in majority for the unpaid installment debts in the Cameroon context; the MFI itself through the personal and friendly relationships with clients. Thus we provide practical strategies for the recovery of these debts till the last franc. In addition, we show that these strategies increase MFI’s sustainability across their profitability.

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Section: Literature Review and Research Questionsmentioning

confidence: 99%

Credit Management as a Predictor to the Sustainability of Microfinance Institutions

TENENG,

KEHDINGA

2023

J.o A.F.

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“…Finally, the learning and growth perspective emphasizesuponhowthefirmmustlearn,improveandinnovateinordertomeetitsobjectives. Despite the fact that BSC has largely improved the performance management system in the financialsector,itsapplicationinthemicrofinanceindustryisnotwellexploredtilldate.Microfinance institutionswereoriginallyintendedforfinancingpoorcommunitiesinordertohelpthemsustain livingandfightagainstpoverty.Assuch,theperformanceofmicrofinanceproviderswasinitially measuredbythesocialimpactofitsactivitiestothewarfareoftheintendedcommunity (Khanetal., 2010).Empiricalstudiesinthisregardmostlyfocusedonfinancialperformanceoftheinstitutions intermsofefficiency,sustainabilityandprofitability.Forinstance, Congo(2002); Godquin(2004); Tucker and Miles (2004) and Arsyad (2005) UndertheproposedBSCmodelofthisstudy,thelearningandgrowthperspectivesmeasurethe extenttowhichthemicrofinanceprovidersarepreparingthemselvesforthefuturethroughemployees' development,satisfactionandinfrastructuredevelopment (Wisner,2010).Ontheotherhand,the internalbusinessprocessperspectivefocusesoninternaloperationsofthemicrofinanceproviders which are geared into providing value of their services offered to clients. According to Kipesha (2013),internalbusinessperspectiveisimportantforcreatingvalueintheproduction,provisionand deliveryofservicestotheclients;buildingarelationshipbetweenemployees,clients,donorsand othersstakeholders;supportingcommunitiesandadheringtolawsandregulationsgoverningthe microfinanceindustry.Furthermore,thecustomerperspectiveinthemicrofinancesectorfocusesupon theviewingofclientsasstakeholderswhoseneedsshouldbesatisfiedbynotonlyfundprovisions, butalsobyfocusinguponcustomersatisfactionandofferingsofqualityproductsandservices (Marr &Tubaro,2011).Allthesethreenon-financialperformancemetricsthenincorporateinorderto measurethefinancialperformanceofthemicrofinanceproviders,therebyenablingthemeasurement ofbothfinancialandnon-financialperformanceoftheorganizations.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

A Comparative Integration Study of Performance Metrics in Microfinance

Iqbal

Nisha

Rifat

2020

International Journal of Information Systems in the Service Sector

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This study aims to understand the cause-and-effect relationship between financial and non-financial measures under a balanced scorecard (BSC) model in the microfinance sector of Bangladesh. Structural equation modeling is employed to test non-financial relationships hypothesized under BSC model and one sample t-tests are conducted to further relate non-financial variables to the financial performance variable for two microfinance providers. While all non-financial variables share positive and significant relationships, findings show that customer perspective and internal business process factors are quite strong and more evident for Grameen Bank than a cooperative bank. As such, microfinance providers which will improve their non-financial perspectives can ultimately benefit from increased financial performance. The article draws attention to microfinance providers so that they can address shortcomings in their current performance measurement systems and identify mechanisms that can help them improve their financial performances. Implications and future directions are discussed too.

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Social and Financial Performance of Microfinance Institutions

Cited by 2 publications

References 0 publications

Credit Management as a Predictor to the Sustainability of Microfinance Institutions

Credit Management as a Predictor to the Sustainability of Microfinance Institutions

A Comparative Integration Study of Performance Metrics in Microfinance

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