Financial Sustainability Analysis Of Microfinance Institutions Based On Informations In Mix Database

The success of Grameen Bank promoted the boom and globalization of microfinance. In the early development of the microfinance industry, most institutions were NGOs relying on international aid or local government support, and their main purpose was to provide more financial services to the poor. In 1990s, microfinance institutions began to realize the importance of sustainability, and emphasize commercial operations.As is general accepted, two essential factors for the success of microfinance institutions target were customers coverage and sustainability of the institutions themselves. Sustainability focuses on the match of revenue and cost. In this paper, financial sustainability of microfinance institutions (i.e. MFIs) was chosen to measure the sustainability, not only because financial sustainability is the important guarantee of going concern, but also because evaluation system constituted by quantitative financial indicators analysis more objective.This paper combined theoretical study abroad information summarizes the definition of microfinance, outlined the classification of MFIs, discussed the importance and meaning of MFIs, compared common evaluation of financial sustainability, and built an evaluation system and measurement methods used in the following quantitate study.Sample data as representative of international mature MFIs were selected from MIX database. Quantitate analysis were from four categories, such as financial structure, profitability, operational efficiency, risk assets and liquidity management, and from four aspects such as time series, regions, organization structure, gross loan portfolio scale and customer volume. The commonality and difference of sample institutions were discussed. Meanwhile, it is verified that dual goals of MFIs, social responsibility and commercial purpose, had no significant divergence. On this basis, the financial performance of domestic MFIs is compared with international samples, especially for NGOs.It is noticed that there were a large gap between the operating performance of domestic and international MFIs, due to limited source of capital, weak financial self-reliance and lack of security agencies. Meanwhile, domestic MFIs also had some advantages, such as:low management costs, reliance on government credit, the favorable environment of Internet financial and market interest rates. Some suggestion of domestic MFIs’further development were presented, such as transforming the business model, opening interest rate market, increasing financial transparency and so on.