Determinants of Financial Sustainability of Microfinance Institutions in Bangladesh

Mohd. Abdur Rahman, Ahmad Rizal Mazlan


Microfinance is a type of banking service that is provided to unemployed or low-income individuals or groups who have no alternative source to gain financial support. Ultimately, the goal of microfinance is to give low income peoples an opportunity to become self-sufficient for their entrepreneurship development. This study investigates the performances of financial self-sustainability of microfinance institutions and compared their positions in Bangladesh. The multiple regression technique is used to measured financial self-sustainability to justify with yield on gross loan portfolio, cost per borrower and also average loan balance per borrower. The multiple regression output revealed that most of the microfinance institutions are financially self-sustainable to operate their operations in this region. However, this study is recommended for policy considerations of the successful and effective microfinance operation productivity and reduces of borrowing funds from the donars, reducing operation cost, generate financial revenue finally to increase of their total assets in Bangladesh.

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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