IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2024-06-34.html
   My bibliography  Save this article

Defining Factors behind the Financial Sustainability of Microfinance Institutions (MFIs) of Bangladesh

Author

Listed:
  • Farhana Yasmin

    (Department of Finance and Banking, Faculty of Business Studies, Bangladesh University of Professionals, Bangladesh)

  • Mst. Sharmin Sultana Sumi

    (Department of Finance and Banking, Faculty of Business Studies, Bangladesh University of Professionals, Bangladesh)

  • Maliha Rabeta

    (Department of Finance and Banking, Faculty of Business Studies, Bangladesh University of Professionals, Bangladesh)

  • Ummay Mahima Ima

    (Department of Finance and Banking, Faculty of Business Studies, Bangladesh University of Professionals, Bangladesh)

Abstract

Bangladesh can be proudly recognized as the pioneer of the microcredit concept. This paper aims to discover the potential firm-specific factors that influence the economic stability of MFIs (microfinance institutions) in Bangladesh. The study has collected quantitative data on one sustainability variable and six predictor variables through performance analysis of the top 120 MFIs of Bangladesh from 2022 to 2023. MFIs having 110% or more operational sustainability have been regarded as financially sustainable and examined based on managerial inefficiency, MFIs size, leverage, breadth of outreach, loan intensity, and deposit mobilization. The findings revealed that except deposit mobilization, all other stated predictors have imposed statistically significant effects on the financial sustainability of the microfinance institutions of Bangladesh of which size and loan intensity have a positive impact whereas managerial inefficiency, leverage, and breadth of outreach have a negative impact. The results of the research can be utilized to increase knowledge about the factors that can be eliminated or controlled to achieve financial sustainability and eventually, all the MFIs being operated in society, especially those who are facing challenges in accumulating their funds will benefit from this research by getting an idea of which determinants to control.

Suggested Citation

  • Farhana Yasmin & Mst. Sharmin Sultana Sumi & Maliha Rabeta & Ummay Mahima Ima, 2024. "Defining Factors behind the Financial Sustainability of Microfinance Institutions (MFIs) of Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 14(6), pages 310-319, October.
    • Handle: RePEc:eco:journ1:2024-06-34
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/16966/8363
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/16966
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Financial Sustainability; Operational Sustainability; Micro Finance; Micro Finance Institutions; Micro Credit;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2024-06-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.