An Evaluation of the Current Status of Microfinance Institutions (MFIs) In Ethiopia

Abstract

The foremost rationale of this article is to make an evaluation of the current standing of MFIs in Ethiopia. The appraisal was made against indicators included types of ownership of MFIs, duration the firm operation, number of employees in the head quarters of the sampled MFIs, mode of maintaining the records of MFIs, types of financial services offered, financers of MFIs, market segment of MFIs, geographical coverage of MFIs, size of MFIs, and the body that governs and supervise the MFIs. The article largely used primary data since such data is not available from secondary sources. And also the study made use of a self-developed questionnaire that was administered to the respondents by the researcher. In addition, the nature of the study rendered analysis techniques to employ descriptive statistics. The results of the analysis were presented in cross tabulation frequency tables to show the general phenomenon of variables being measured. SPSS statistics version 20.0 was used for descriptive statistics such as creating cross tabulation frequency tables. Based on the empirical evidence of this study, it was found out from the study that, considering the undertaken performance indicators, most of Microfinance Institutions in Ethiopia have performed well from year to year during the period under review. Finally, the trend in performance of microfinance institutions during those years of operation was encouraging. Thus, the study recommends that Microfinance Institutions in Ethiopia to be successful and sustainable, a successful economic development strategy must be crafted to compete and to thrive today’s global economy