Comparative Analysis of Financial Sustainability Indicators in Microfinance Institutions: Across Selected Asian and African Countries
Year: 2025
Type: article
Abstract: This study conducts a comparative analysis of the financial sustainability of microfinance institutions (MFIs) across selected Asian and African countries.The research evaluates key financial sustainability indicators, including Return on Assets (ROA), Return on Equity (ROE), Portfolio at Risk (PAR >30 days), Operational Self-Sufficiency (OSS), and Financial Self-Sufficiency (FSS).Data sources include academic articles (Google Scholar), World Bank reports, MIX Market data, and MFI annual reports.The analysis reveals that Asian MFIs (particularly in South Asia) generally outperform African MFIs in terms of ROA and OSS, demonstrating stronger financial sustainability.African MFIs, however, tend to operate with lower profitability and many barely break even.This discrepancy is mainly attributed to higher operational costs, limited economies of scale, and, in some cases, inadequate interest rates.Nonetheless, both regions maintain strong portfolio quality, as indicated by low delinquency rates.The findings suggest that economies of scale, efficiency, and revenue structures significantly influence the financial sustainability of MFIs.Asian MFIs benefit from larger operational scales, leading to higher operational margins, whereas African MFIs often struggle with funding constraints and higher cost structures.These insights can contribute to the development of effective policies and strategies aimed at enhancing the financial sustainability of MFIs.
Source: ANCIENT LAND
Author: Adil Mammadov
Institution: Azerbaijan State University of Economics
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4409813547