This work reviews the role of microfinance institutions in the Ethiopian economy, which was done by using a balanced scorecard (BSC) performance review approach that integrates both financial and nonfinancial metrics. The BSC framework of the review was developed using a total of performance indicators that were equally categorized under BSC perspectives (financial, customer, internal business processes, and learning and growth). The developed framework was applied to MFIs operating in Ethiopia, which have head offices in all regional capitals of the country and report to the Association of Ethiopian Microfinance Institutions (AEMFI) starting in 2010–2012 consecutively. The work of the review shows that based on their financial role, on average, the institutions reviewed are sustainable with high relative productivity and low profitability. The average non-financial performance is also high, indicating that the reviewed institutions are highly performing in both non-financial and financial measures. Beside the role performance, the work of this review confirmed the relationship assumption of BSC perspectives and it shows a positive correlation among them. The review concludes that comprehensive performance is observed when it is measured in a collective way. So, Ethiopian MFIs suggested paying attention to the use of BSC as a performance measurement tool and as a hub for specified role indicators that need enhancement.
| Published in | Journal of Business and Economic Development (Volume 9, Issue 1) |
| DOI | 10.11648/j.jbed.20240901.11 |
| Page(s) | 1-9 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
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Copyright © The Author(s), 2024. Published by Science Publishing Group |
Iqub, Iddir, Balanced Score Card
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APA Style
Zeleke, G. F., Tolesa, S. F. (2024). Role of Microfinance Institutions in Ethiopian Economy: A Review. Journal of Business and Economic Development, 9(1), 1-9. https://doi.org/10.11648/j.jbed.20240901.11
ACS Style
Zeleke, G. F.; Tolesa, S. F. Role of Microfinance Institutions in Ethiopian Economy: A Review. J. Bus. Econ. Dev. 2024, 9(1), 1-9. doi: 10.11648/j.jbed.20240901.11
AMA Style
Zeleke GF, Tolesa SF. Role of Microfinance Institutions in Ethiopian Economy: A Review. J Bus Econ Dev. 2024;9(1):1-9. doi: 10.11648/j.jbed.20240901.11
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Download@article{10.11648/j.jbed.20240901.11,
author = {Gizaw Fetene Zeleke and Shibeshi Fekadu Tolesa},
title = {Role of Microfinance Institutions in Ethiopian Economy: A Review},
journal = {Journal of Business and Economic Development},
volume = {9},
number = {1},
pages = {1-9},
doi = {10.11648/j.jbed.20240901.11},
url = {https://doi.org/10.11648/j.jbed.20240901.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20240901.11},
abstract = {This work reviews the role of microfinance institutions in the Ethiopian economy, which was done by using a balanced scorecard (BSC) performance review approach that integrates both financial and nonfinancial metrics. The BSC framework of the review was developed using a total of performance indicators that were equally categorized under BSC perspectives (financial, customer, internal business processes, and learning and growth). The developed framework was applied to MFIs operating in Ethiopia, which have head offices in all regional capitals of the country and report to the Association of Ethiopian Microfinance Institutions (AEMFI) starting in 2010–2012 consecutively. The work of the review shows that based on their financial role, on average, the institutions reviewed are sustainable with high relative productivity and low profitability. The average non-financial performance is also high, indicating that the reviewed institutions are highly performing in both non-financial and financial measures. Beside the role performance, the work of this review confirmed the relationship assumption of BSC perspectives and it shows a positive correlation among them. The review concludes that comprehensive performance is observed when it is measured in a collective way. So, Ethiopian MFIs suggested paying attention to the use of BSC as a performance measurement tool and as a hub for specified role indicators that need enhancement.
},
year = {2024}
}
TY - JOUR T1 - Role of Microfinance Institutions in Ethiopian Economy: A Review AU - Gizaw Fetene Zeleke AU - Shibeshi Fekadu Tolesa Y1 - 2024/03/13 PY - 2024 N1 - https://doi.org/10.11648/j.jbed.20240901.11 DO - 10.11648/j.jbed.20240901.11 T2 - Journal of Business and Economic Development JF - Journal of Business and Economic Development JO - Journal of Business and Economic Development SP - 1 EP - 9 PB - Science Publishing Group SN - 2637-3874 UR - https://doi.org/10.11648/j.jbed.20240901.11 AB - This work reviews the role of microfinance institutions in the Ethiopian economy, which was done by using a balanced scorecard (BSC) performance review approach that integrates both financial and nonfinancial metrics. The BSC framework of the review was developed using a total of performance indicators that were equally categorized under BSC perspectives (financial, customer, internal business processes, and learning and growth). The developed framework was applied to MFIs operating in Ethiopia, which have head offices in all regional capitals of the country and report to the Association of Ethiopian Microfinance Institutions (AEMFI) starting in 2010–2012 consecutively. The work of the review shows that based on their financial role, on average, the institutions reviewed are sustainable with high relative productivity and low profitability. The average non-financial performance is also high, indicating that the reviewed institutions are highly performing in both non-financial and financial measures. Beside the role performance, the work of this review confirmed the relationship assumption of BSC perspectives and it shows a positive correlation among them. The review concludes that comprehensive performance is observed when it is measured in a collective way. So, Ethiopian MFIs suggested paying attention to the use of BSC as a performance measurement tool and as a hub for specified role indicators that need enhancement. VL - 9 IS - 1 ER -
Department of Agricultural Economics, Faculty of Resource and Management and Economics, Wollega University, Shambu Campus, Shambu, Ethiopia
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