| dc.description |
The objective of the study was to find out the effect of microfinance outreach on
their profitability using some microfinance institutions in Tanzania as cases for the
study. Tanzania was selected because, the country enjoys peace, political stability
and also it is gifted with huge natural resources but the majority of its people especial
the rural population lives in absolute poverty.
The study used data of nine (9) microfinance institutions in Tanzania. The data was
obtained from Microfinance Information eXchange (MIX) market. Data analysis was
conducted using three simple regression models. Specifically, the study wanted to
determine first, the effects of number of active borrowers on cost per borrower.
Second, was to determine the effects of cost per borrower on the microfinance
profitability. Finally, the study was set to determine the overall effect of number of
active borrowers on the profitability of microfinance institutions.
It was found that, the number of active borrowers is negatively related with the cost
per borrower; the cost per borrower is positively related with the operational selfsufficiency;
and the number of active borrowers is positively related with the
operational self-sufficiency. That is, the increase in number of active borrowers
results into decrease in the cost per borrower which in turn leads into increased
profitability. Thus generally, the study concludes that the number of active borrowers
has a positive influence on the profitability of microfinance institutions.
Based on the study findings, the study recommends that in order for the microfinance
institutions in the country to be profitable, they should ensure that they increase the
number of active borrowers. |
|