Do microsavings stimulate financial performance of microfinance institutions in Sub-Saharan Africa?

摘要

Purpose - The purpose of this paper is to investigate the empirical relationship between microsavings and the financial performance of microfinance institutions (MFIs) in Sub-Saharan Africa (SSA). Design/methodology/approach - The approach in this paper is decidedly empirical, and employs data obtained from Microfinance Information eXchange (MIX). The data set consists of 350 microfinance MFIs domiciled in 36 Sub-Saharan African countries for the period covering 1998-2012. Findings - The panel estimation results consistently show that there exists a negative and statistically significant relationship between microsavings and the financial performance of MFIs in SSA. This is perhaps surprising, albeit rational considering the exceedingly elevated operating expenses that ascend from mobilizing and managing microsavings, ceteris paribus, that could erode firm profitability. The paper draws policy implications from these important findings.