Literature Review on Health Administration

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  • Topic: Microfinance, Poverty, Microcredit
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  • Published : August 14, 2011
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Outreach and Financial Performance
Analysis of Microfinance Institutions in
Ethiopia
By: Befekadu B. Kereta
National Bank of Ethiopia
Economic Research and Monetary Policy Directorate
E-mail: befekadu_be@yahoo.com
African Economic Conference
United Nations Conference Center (UNCC), Addis
Ababa, Ethiopia
15-17 November 2007
2
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 2005/061. 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). From financial sustainability angle, it finds that MFIs are operational sustainable measured by return on asset and return on equity and the industry's profit performance is improving over time. Similarly, using dependency ratio and Non-performing Loan (NPLs) to loan outstanding ratio proxies the study also finds that MFIs are financial sustainable. Finally, it finds no evidence of trade-off between outreach and financial sustainability. 1 Source: National Bank of Ethiopia database.

2 The MFIs have been receiving licenses and supervised by NBE under the proclamation number of 40/1996.
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Table of Contents
Abstract.......................................................................................................................... 2 Table of Contents................................................................................................................ 3 Tables and Figures .............................................................................................................. 4 Chapter 1- Introduction....................................................................................................... 5 Chapter 2- Literature review............................................................................................... 8 2.1 Theoretical framework.............................................................................................. 8 2.2 Empirical literature review ..................................................................................... 13 Chapter 3- Empirical Analysis of MFIs............................................................................ 15 3.1 Structure of MFIs.................................................................................................... 15 3.2 Performance of MFIs .............................................................................................. 17 3.2.1 Outreach........................................................................................................... 17 3.2.2 Financial Sustainability.................................................................................... 20 3.2.4 Related Performance Indicators....................................................................... 24 3.3 Challenges of MFIs................................................................................................. 26 Chapter 4- Conclusion and Policy Implications ............................................................... 28 References:.................................................................................................................... 30 4

Tables and Figures
Table3.1. Non-Performing Loan (NPL) to Loan Outstanding...
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