Browsing by Author "MUNA HABTE"

Filter results by typing the first few letters
Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    FACTORS AFFECTING GROWTH AND SUSTAINABILITY OF MICROFINANCE INSTITUTIONS IN GURAGE ZONE
    (wolkite universty, 2025-08) MUNA HABTE
    Currently Microfinance institutions (MFIs) play a significant role in Ethiopia's financial sector. This study, focused on identifying determinants of growth and sustainability of MFIs in Gurage Zone, specifically in Wolkite, Emidibir and Agena towns, and selected three branch from each MFIs. Descriptive and econometric methods were employed to analyze the data collected from a sample of 92 respondents using structured questionnaires. The design of data was both qualitative and quantitative data type and random sampling methods were used. Primary sources were employed to gather reliable information from the respondents. The study considers respondents from three selected institutions namely, Omo, Metemamen and Meikilit. From the descriptive result, microfinance institutions (MFIs) in the Gurage Zone are generally perceived positively in terms of governance structure, with most respondents viewing it as effective. The majority of MFIs conduct regular strategic reviews, suggesting a focus on maintaining strong institutional performance. MFIs are seen as crucial for low and moderate-income individuals who lack access to banking services. The operational challenges include high operational costs, lack of skilled personnel, ineffective management practices, and poor technology infrastructure. The econometric model estimation the Operational challenges, Economic condition, and Source of funding have a positive coefficient, which indicates that the increment on the independent variable have direct impact dependent variables. But, Social affair have negative and significant impact on sustainability and growth of MFIs. MFIs should focus on improving the financial sustainability of institutions by strengthening financial management practices and diversifying funding sources to reduce dependence on grants, loans and risk management. The operational challenges should be addressed through strategic investments in staff training, better management practices, and technology upgrades. MFIs should advocate for regulatory frameworks that balance strictness and flexibility, particularly in areas like interest rates, credit limits, and licensing