Assessing the Institutional Outreach and Sustainability of Micro Finance Institution in Ethiopia: Evidence from Omo Microfinance Institutions Hawassa Branch

Abstract

Institutional sustainability and outreach are key for achieving the micro finance goal of meeting financial requirement of poor people. So, the objective of this study was to assess the institutional outreach and sustainability of Omo Microfinance Institution at Hawassa branch.  To this end, the researchers had used descriptive research design because using this type of research design enables the researchers to assess and describe the present situation of institutional sustainability and outreach of the institution.  The primary data was collected from 60 randomly selected employees of OMFI Hawassa branch using structured questionnaire. Then, descriptive statistics analysis has been done through SPSS version 23.0 in order to get the reliable findings.  Consequently, the result of  the study showed that the factors influencing outreach and sustainability of OMFI Hawassa branch were nature of loan extended to customers, Poor loan management, flexibility of loan repayment schedule, loan defaulting faced by customers, and  per customer outstanding. Besides, the study showed  that level of sustainability and institutional outreach level is increased by higher deposit mobilization, saving mobilization extended to borrowers, increase in saving amount, and  regulatory saving framework for the reason most of the respondents expressed their positive level of agreement with statements asked about  this variables. Based on the findings of the study, the researcher forwarded possible recommendations for the OMFI Hawassa branch in order to improve the institutional sustainability in one hand and outreach in other hand.

Keywords: Omo Microfinance Institution, Institutional Sustainability, Outreach

DOI: 10.7176/RJFA/11-15-01

Publication date:August 31^st 2020