Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
The sustainability of microfinance institutions in South
Microfinance targets the poor and very poor, both in urban and rural areas. It has become a common method of poverty alleviation in many developing countries. Several microfinance institutions have adopted a social mission to eradicate poverty by providing credit to the poor. In the past, microfinan...
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Language: | English |
| Published: |
Research of GSB
2018
|
| Subjects: | |
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867613181352869888 |
|---|---|
| access_status_str | Open Access |
| author | Lekatsa, Teboho |
| author2 | Standish, Barry |
| author_browse | Lekatsa, Teboho Standish, Barry |
| author_facet | Standish, Barry Lekatsa, Teboho |
| author_sort | Lekatsa, Teboho |
| collection | Thesis |
| description | Microfinance targets the poor and very poor, both in urban and rural areas. It has become a common method of poverty alleviation in many developing countries. Several microfinance institutions have adopted a social mission to eradicate poverty by providing credit to the poor. In the past, microfinance organizations used to focus on farmers in rural areas. Modern microfinance programs are focused on the population that is largely neglected by the formal financial sector, specifically women. Due to the perceived risk in this type of uncollateralized lending, private equity markets are not keen on financing microfinance institutions. Furthermore, microfinance institutions are seen as socially motivated as opposed to being financially motivated. For that reason, their profitability and sustainability has come under question in the last decade. Two approaches to the issue of sustainability exist. The dominant institutionist approach argues that microfinance institutions should focus on being sustainable as this will improve their chances of alleviating poverty. The welfarist approach disagrees with this view by arguing that focusing on sustainability will result in the neglect of the poorest of the poor. This study analyses the sustainability of microfinance in South Africa by using a case study research approach. The study explores the challenges to sustainability in South Africa. The results of the study indicate that the microfinance institutions are not profitable nor self- sufficient. The most notable challenge to this sustainability is the high personnel costs. South African MFIs experience higher operating costs than their African counterparts. The study also indicates that the more financially sound microfinance institutions have a lower level of depth outreach than the more subsidy dependent institutions. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/29002 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:32:03.909Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/29002 The sustainability of microfinance institutions in South Lekatsa, Teboho Standish, Barry Development Finance Microfinance targets the poor and very poor, both in urban and rural areas. It has become a common method of poverty alleviation in many developing countries. Several microfinance institutions have adopted a social mission to eradicate poverty by providing credit to the poor. In the past, microfinance organizations used to focus on farmers in rural areas. Modern microfinance programs are focused on the population that is largely neglected by the formal financial sector, specifically women. Due to the perceived risk in this type of uncollateralized lending, private equity markets are not keen on financing microfinance institutions. Furthermore, microfinance institutions are seen as socially motivated as opposed to being financially motivated. For that reason, their profitability and sustainability has come under question in the last decade. Two approaches to the issue of sustainability exist. The dominant institutionist approach argues that microfinance institutions should focus on being sustainable as this will improve their chances of alleviating poverty. The welfarist approach disagrees with this view by arguing that focusing on sustainability will result in the neglect of the poorest of the poor. This study analyses the sustainability of microfinance in South Africa by using a case study research approach. The study explores the challenges to sustainability in South Africa. The results of the study indicate that the microfinance institutions are not profitable nor self- sufficient. The most notable challenge to this sustainability is the high personnel costs. South African MFIs experience higher operating costs than their African counterparts. The study also indicates that the more financially sound microfinance institutions have a lower level of depth outreach than the more subsidy dependent institutions. 2018-11-06T14:03:30Z 2018-11-06T14:03:30Z 2014 Master Thesis Masters MCom http://hdl.handle.net/11427/29002 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance Lekatsa, Teboho The sustainability of microfinance institutions in South |
| thesis_degree_str | Master's |
| title | The sustainability of microfinance institutions in South |
| title_full | The sustainability of microfinance institutions in South |
| title_fullStr | The sustainability of microfinance institutions in South |
| title_full_unstemmed | The sustainability of microfinance institutions in South |
| title_short | The sustainability of microfinance institutions in South |
| title_sort | sustainability of microfinance institutions in south |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/29002 |
| work_keys_str_mv | AT lekatsateboho thesustainabilityofmicrofinanceinstitutionsinsouth AT lekatsateboho sustainabilityofmicrofinanceinstitutionsinsouth |