Relationship of financial Sustainability and Outreach in Ethiopian Microfinance Institutions: Empirical Evidence

Abstract

The study aimed to investigate the association between financial Sustainability and Outreach in Ethiopian Microfinance Institutions empirically. To achieve this objective the researcher developed a hypothesis entitled “there is no relationship between outreach and financial sustainability of microfinance institutions in Ethiopia”. To test this hypothesis I selected three outreach indicators and two financial sustainability indicators and this was tested by using secondary data for the year 2011 from Mix market data of five microfinance institutions and found that data supports the hypothesis. Therefore, the study concluded that there is no statistically significant relationship between outreach and financial sustainability in Ethiopia. I suggest others to conduct further study by taking more institutions.

Keywords: Microfinance, Financial Sustainability, outreach