Financing structure and outreach of selected SADC microfinance institutions (MFIS)

This paper probes the link between financing structure and outreach noting the commercialization trend for selected Southern Africa Development Community (SADC) MFIs. Assuming MIX panel data on 60 MFIs, this study tackles outreach depth and breadth – a diversion from an outreach depth-centered study which employed Planet Rating data on 74 Sub-Saharan African MFIs. Robust panel methods show that, both outreach depth and breadth are affected by the same variables, though in a different way. Equity, deposits and ‘new’ MFIs significantly further depth whilst borrowings limit depth. Breadth is constrained by borrowings, equity and ‘new’ MFIs while deposits expand the breadth. We suggest that, permitting MFIs to collect deposits go a long way in spurring outreach depth and breadth.