Sustainability of Microfinance Institutions in Togo
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Date
2016-10-30
Authors
Kodjo, Abalo
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
For several years now, microfinance has become an important tool in the fight against
poverty. That is why this study sought to analyse the sustainability and success of the
microfinance institutions (MFIs) in Togo, and to identify explanatory factors for this
sustainability and success. The study is based on data obtained from 63 MFIs,and
covering the period from 2002 to 2008. It used two indicators to measure MFI financial
sustainability: the operational self-sufficiency (OSS) and the subsidy-dependence index
(SDI). It found that, overall, the MFIs studied were not financially high-performing and
still depended on subsidies: their OSS was, on average, below acceptable standards.
Several factors were found to be statistically significant in terms of explaining the
variation in those MFIs’ performance. Among them are the MFIs’ number of beneficiaries,
the number of years they have been in business, their labour productivity, observance
of prudential rules, and the existence of a relationship between the MFIs and banks.
Description
Keywords
operational self-sufficiency (OSS), , subsidy-dependence index (SDI), , Microfinance institutions (MFIs)