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Depth of outreach and financial sustainability of microfinance institutions

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Abstract:

The primary justification for subsidizing Microfinance Institutions (MFIs) is their enhancement of social welfare by extending credit to the poor households. Therefore, recent emphasis on their financial self-sufficiency has created concern, that this may adversely affect the mission of social outreach. Utilizing data from 702 MFIs operating in 83 countries, this study shows empirical evidence of a positive complementary relationship between financial sustainability and depth of outreach.

Keywords: G29; O12; O16; depth of outreach; financial sustainability; microfinance institution

Document Type: Research Article

DOI: https://doi.org/10.1080/00036846.2011.577016

Affiliations: Department of Economics,University of Massachusetts Lowell, One University AvenueLowellMA 01854, USA

Publication date: 2012-09-01

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