Managing growth of microfinance institutions (MFIs): Balancing sustainability and reaching large number of clients in Ethiopia

Abstract

The overriding objective of MFIs in Ethiopia is to provide a broad range of m services to large numbers of poor households. This is realized by develop sustainable MFIs. A large number of MFIs have achieved significant progress in terms of both outreach and sustainability. As of June 2005, the twenty six deposit taking MFIs had an active loan portfolio of about 1.5 billion Birr (173 million USD) delivered to 1,211,305 active clients. They mobilized about 501million Birr (58 million US dollars) in savings. The an MFIs attained such a significant outreach in a brief period of time. Between 2001 05, the number of clients, 479%, and 206%, respectively. In 2004, 12 out of the 15 MFIs were operationally able, while 5 were financially sustainable. The majority of the MFIs i efficiency and productivity indicators as a result of expansion or increase in outreach. Out 15 MFIs, eleven had less than 5% portfolio at risk, which was encouraging. Out of MFIs which registered significant growth in ou decline in their portfolio at risk. As a result of the increased ou