서강대학교

초록/요약

Purpose: If microfinance institutions were to operate on commercial basis, can they maintain the mission of poverty alleviation as well as remain financially stable? The study attempts to answer this question using a country setting where the clients of market-oriented microfinance banks are the poorest of the poor. The aim is to ascertain whether microfinance institutions can fund their operations or should be funded by donation, or whether government should seek other credible disbursement framework to reach the poorest of the poor. Method: Mission sustainability microfinance banks were profiled on capital adequacy, loan quality, liquidity status, and deposit base following a balanced panel design. Then, these profiles were used to explain profitability and financial sustainability on the thesis that profitable banks have a portfolio of quality loan and maintain adequate capital to cushion against deposit run-off. Findings/Recommendations: The study reveals low level of profitability and sustainability, and hence recommends that Government and Monetary authorities (CBN) should increase the capital requirements for the establishment of Microfinance Banks as the current requirements are inadequate; embark on effective monitoring of the activities of Microfinance Banks; and promulgate policies that will enhance transparency, proper accountability and competition in the sector to attract more credible investors. Implications: The result suggests that the Institutional approach could be pursued vigorously with good policy environment for the MFBs to operate profitably. The Welfarists approach to the provision of microcredit to the poorest of the poor could be practice alongside, but by using the NGOs, religious organization e.t.c. to help fasten the achievement of the millennium development goals of reducing the proportion of people who suffer from hunger or live on less than a dollar per day Originality/Value: The view that market-oriented microfinance institutions cannot fund their operations if they were to sustain their mission of poverty alleviation does not hold as there is evidence of profitability as revealed by the study; therefore, the sustainability of microfinance institutions should be a priority of the government at every tier.