Determinants of Financial Sustainability of Microfinance Institutions in Pakistan

centered requirements. This promotes to theconcept ofthe fundamentals ofallprocedures are replaced with client- amongst socialandcommercial goals. For this purpose, cording to whichmicrofinance has to manageasteadiness ology for crossing thethreshold ofsustainablegrowth, ac Speyer [2012]presented anew “socio-commercial” method profit/social andprofit nature. Lützenkirchen, Weistroffer and MFIs outreach isnotfullyachieved. siderable growth inrecent years. Therefore, theinitial goalof dividual borrowers, hasachieved althoughthemarket acon aswell smallprojects to asin bebeyond theneedto support lieve it to bequite risky. The microfinance isviewed market loans. However, mosttraditional conventional bankersbe mostly work withtheborrowers comparatively seeking small ita income ofonedollar[Morduch, 2000].Suchinstitutions approximately onebillionpeopleglobally live withpercap improve thehumandevelopment index ofacountry, since and developing newbusinesses. Microfinance isneeded to as helpingtheexisting companies to diversify theiractivities jobcreation, reduction, women empowerment,erty aswell formarkets meetingdevelopment objectives, suchaspov individualsor orunderserved to unserved nancial services goal of MFIs, as development organizations, is to provide fi people withlow income. [1999]argues Ledgerwood that the asatool ofeconomic developmentserve aimedto benefit experience lower levels [Abdulai, poverty Tewari, 2016].MFIs tem indeveloping countries. Countries having larger MFIs ofthefinancialsys since theybecamepart acknowledged ofmicrofinanceThe institutions(MFIs)hasbeen importance INTRODUCTION Farah Naz, Sarah Salim,Ramiz ur of microfinanceinstitutions inPakistan Determinants offinancialsustainability stan. Upravlenets–TheManager,2019,vol. 10,no.4,pp.51–64.DOI:10.29141/2218-5003-2019-10-4-5. For citation: Paper submitted:March 29,2019 JEL Classification:G20,G21,G29 Keywords: publicadministration; sustainability;profitability; outreach; microfinance; microfinance institution;Pakistan. and three-stage leastsquare (3SLS) estimationstrategy. determining performance and outreach factors to date considering the simultaneous causation adopting two-stage least square (2SLS) idea how to achieve both goals simultaneously. To the authors knowledge, this is the first study concentrated specifically on Pakistanin in managers MFIs’ to guidance provides study The performance. determining the factors that financialcould affect their financialfor performance and reaching incrementforemost objectives of any an MFI. Managers can get an be to seen is poor the to serving rather on loan portfolio are the main factors influencing the financial performance of MFIs in Pakistan. No sign of mission drift has been found yield and size loan average risk, efficiency,at cost portfolio size, MFIs’ that reveal results The 3SLS. and 2SLS i-e technique variables instrumental through endogeneity for accounting later with effect random and effect fixed uses study The Market. MIX from obtained 2008–2014 period the for MFIs 29 of set data panel unbalanced an utilizes paper The strata. poorer the serving in goal conflicting a becomes sustainability and profitability attaining if establish to as well as Pakistan, in institutions microfinance of sustainability and it difficult for them to survive. The current study aims to investigate the determinants affecting the financial performance, i.e. profitability reduced with the help of microfinance sector. Pakistani microfinance institutions (MFIs) are facing a decline in profitability which makes Abstract. Since Pakistan achieved independence, poverty has become one of the most important issues in the country, which can be DOI: 10.29141/2218-5003-2019-10-4-5 MFIs are a special kind ofinstitutionshavingMFIs are bothnon- aspecialkind Naz F., Salim S., Rehman R. ur, Ahmad M.I., Ali R. Determinants of financial stability of microfinance institutions in Paki Rehman, Muhammad Ishfaq ------ity of MFIs to coverity the operational cost independently from [2015] define operational asSaout the capac sustainability ofMFIs.determining thefinancialsustainability Daherand Le (FSS)aretwo waysficiency found intheliterature aimed at sideredKhan, 2016]. asfinanciallysustainable [Hossain, tional expenses withsubsidiesand funds, are alsonotcon able. Moreover, profit-generating MFIs, covering itsopera or generating loss are characterized as financially unsustain [Dunford, 2003].MFIswithtruncated financialperformance withoutconstantachieving theirobjectives donor support ing financial growth measures. oftherelationout themultidimensionaldirection concern of thefinancial tried to figure measurereturn andactually mance andsocialoutreach to separate outtheconstituents ized therational association amongstthefinancial perfor structure, outreach, costMeyer anditseffect. [2019] reorgan globally, isstudiedinrelation theMFIsproductivity to capital andrevenuees insustainability determination. To compare [2019] scrutinized profit-oriented MFIsin ofdifferencterms threshold. Oliveira Leite, Santos andSacramento Mendes subsidized MFIshave to acertain shown inproductivity arise 2000]. Ontheotherhand, Hudonand Traca [2011]found that of subsidization andthusprove to[Morduch, belessefficient claimed that non-profit MFIsare unable to endure any short portfolio, whichultimately benefitsmoreIt isalso people. be accomplished andhelpto withearnings enlarge itsloan a profit-oriented approach can affirm that self-sustainability commercial nature of ofmicrofinancing andthesupporters Operational (OSS) and financial self-suf self-sufficiency Financial ofMFIsto keepon istheability sustainability Ahmad, Rizwan

Public andMunicipalAdministration Ali ------51 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 52 УПРАВЛЕНЕЦ 2019. Том 10. № 4 many peoplelive line. below However, thepoverty thissitu gained independence. This where is a developing country offering mechanismandoutreach indistant and remote re of microfinance banks(MFBs)due to theirunconventional [Ahmad,because oftheirunsustainability 2011]. poor inthelongrun,astheywillnolongerbeinto existence Rauf, the 2012].UnsustainableMFIsare unableto support in theabsence ofsubsidies[Tucker, 2004;Mahmood, Miles, encourages MFIsto maximumprofits earn to meet expenses and subsidiesare nolongerprovided [Nyamsogoro, 2010].It coverstainability operational expenses even iffinancialaids inthefuture [Tucker, andself-sufficiency ity Miles, 2004].Sus great for MFIsthat demandfinancialsustainabil importance prices frommarket the income generated. Profitability holds ing operational aswell asfinancing costs orsubsidies valued at seen asfinanciallyself-sufficient, ifthey arecapableof cover generated However, income withoutdonorsupport. MFIsare on the enquiry ifmicrofinance facilitiesprovideon theenquiry anaidinpov to microfinance amenitiesand, asa result, puts anemphasis developments canbeexplicitly creditedwhether particular wards theusers. analysis An empirical attempts to gauge needs scale ofmicrofinanceto beaugmented services to the country’s economic development. For thisreason, the financial sustainability, in as it holds significant importance stani microfinance institutionsshouldbefully aware oftheir andoutreachout ifsustainability influence eachother. Paki andprofitability ofMFIsin tainability and to figure Pakistan search that isto affect thefinancialsus establishthefactors cultural, economic andotherdifferences. The goalofthere for othercountries are inapplicablefor Pakistan dueto its MFIs have worldwide, beenconducted theresults obtained ofMFIs. of ity Although thestudiesonfinancialsustainability need to that affect thefinancialviabil determine thefactors MFIs inPakistan andthere isofconsiderable isa importance Nadolnyak, 2007]. [Hartarska, Therefore, of thesustainability ation canbeimproved withthehelpofmicrofinance sector contrast to 44.15%average loans inurban in an average yearly increase inrural loans equaled61.19 % rural loans is faster ascompared to ones. 2013–2017, urban In ened customer base(33%).Additionally, thedevelopment of driven by theincreased average loansize (14%)andbroad advances, realizing PKR133.0billion(52%in2017). This is 2017 whichispredominantly determined by anupsurge in MFBs have a45%growth observed inbalance sheetsize in of commercial banksamounting to 74%only. addition, In since% rise 2013 in contrast to an increase in the number asindispensablefunds. served isevident fromThis fact a300 and livestock sectors, whereas enhanced growth indeposits seen across different organizations operating inagriculture improves profitability. flow offundshasbeen Awide-ranging rapid growth in rural advances, enhances customer base and gions. This lendingmodelinclinestowards witha maturity http://www.sbp.org.pk/FSR/2017/index.htm. Государственное имуниципальноеуправление Poverty has been an important issueinPakistan sincePoverty it hasbeenanimportant 1 In Pakistan, thereIn isasubstantial growth inthenumber State BankofPakistan. Financial 2017.Available Review Stability at: 1 . ------from traditional banks. Since traditional banksprovide finan and poorpeople, astheyare unableto derive thesebenefits ings, insurance, and several to needy other financial services financial institutions. holders, includingthegeneral public, government, andother study ishelpfulto notonlymanagers, butalsootherstake objective. reduction help MFIsinachievingtheirpoverty The providing finance to thepoorbutproductive population will where manying country peoplelive line, below thepoverty and adoptappropriate strategies. Since Pakistan isadevelop reach. These canenableMFIsmanagers to develop factors identifying andout thecausation between sustainability becauseithelpsin thenotionoftrade-off, properly observe Secondly, simultaneousequation models(SEMs)are usedto ing for thenature offor-profit andnon-profit organizations. outreach providissue aboutmeasuring andsustainability and depthofoutreach inPakistan. Firstly, we address the tors thatinfluence empirically thefinancialsustainability of2008–2014areperiod usedfor theanalysis. val data for 29 microfinance institutions of for the Pakistan [Ledgerwood, 1999; Khandker, 2005; Islam, 2009]. The archi alleviation andimprove thelivingstandardserty ofmasses promote smallaverage loansizes asasignificant indicator af alleviation. Furthermore,maximization andpoverty MFIs atrank thecost sustainability oftheir missionofoutreach outtoturn bethemost extensively usedmeasure that might to beprovided [Navajas etal., 2000].Average loan size has ofeconomies ofscalethat thetypes havebecause itpermits represents by households, MFIsricher poor customers served age loan size (ALS) given to poor borrowers. Smaller loan size their outreach speciallyto objective poorer borrowers. outreach to determine MFIsdeviate ifprofit-seeking from total assets. The studyalso includes themeasure ofdepth MFIs useassetsto profits, earn measuredafter asprofit taxes/ It evaluatesmeasure how financialperformance. efficiently The current studyusesreturn onassets(ROA) andOSSto Kretzschmar,makhanova, Fedhila, 2015;Ayayi, Sene, 2010]. used asatool for[Nur financialsustainability measuring conclusions. environment ofdifferent countries, which results inmixed anddependonthecircumstances and main contradictory The findings ofnumerous so far MFIs studies conducted re institutions having boththesocialandprofit nature. the essence ofallthemissimilar. of MFIsare aspecialkind provide different definitionsofmicrofinance institutions,but ofpoorpeopleandto empowerpacity them. Various scholars ing isthemostappropriate way to increase ca theearning iswell-recognized members.poor society It that microfinanc institutions isto meetthefinancialandproductive needsof to thewealthy,cial services themainconcern ofmicrofinance LITERATURE AND REVIEW HYPOTHESES Microfinance refers to theprovision ofloans, leasing, sav The present studycontributes to determining thefac Depth ofoutreach ofOutreach.Depth refersDepth to anaver Sustainability. Operational (OSS) is widely self-sufficiency ------loan staff, borrowers, owners as equity well asoutsideinves relationshipsarose basedonmoral inagency hazards among shaped by delegation cost andendogenousmonitoring that between sustainability, outreach orfinancialleverage were financially sustainable. The findings revealed that trade-offs level of outreach to the poorest population who remained crofinance organizations that to maximizeexpected the [2011] studied the problems andSzafarz of mi Armendáriz have anegative effectonprofitability andsustainability. proved ofMFIs. efficiency Accordingly, OELPassumes to (OELP).portfolio A decrease in theratio trend indicates im literature. grounds aswell evidence asontheempirical found inthe thehypothesessection, are builtbasedonthetheoretical fecting outreach for emphasizingtheircore this mission.In for higher disclosure. Johnson and Mhlanga [2007] Bogan, closure, however, showed anegative effect onsustainability sure. Average loansize remained insignificant for lower dis cant effectonsustainability for bothlower andhigh disclo [2018] found that gross hadapositive signifi loan portfolio creasing thesize of loanormonitoring costs. andRana Mia small and unsecured loan could still be covered without in [2013]suggestedof thepopulation.that Kipesha thecost of thepoorer strata from theirmissionofserving they depart interest (operational andreturn onasset), sustainability i-e son [2013]identified that when MFIsshow more financial their profitability, however, Mill reducing outreach mission. ofMFIsin of has apositiveterms effectontheperformance reach ofMFIs. Pedrini etal. [2016]revealed that missiondrift increase incommercialization; however, itdecreases theout financial sustainability, increases assustainability withthe relationship isestablishedbetween commercialization and andoutreachability ofmicrofinance institutions. Adirect [2016] examined theeffect of commercialization onsustain a negative insignificant relationship. QuayesAbdullah and two. andStrøm [2007]andMersland Gonzalez [2010]found then weapositive canexpect relationship between the if smallersize provides loan,inturn, better repayment rate, size ofloan,itdecreases theprofitability offirms. However, as administrative cost does notdeclinewithadecrease in average loan size [Kar, 2012]. Previous studies suggest that each customer rises, itispossiblethat MFIsdecrease the of loangiven to poorborrowers. While associated risk with (OSS)and ROA. sufficiency greater loansizes aspredicted intheliterature. expenses and relative loan size. However, that is declining for cally significant and robust association amongstoperating Hermes, Lensink andMeesters[2011]anticipated statisti the increased operating expenses decrease sustainability. Daher and Le [2015],Ayayi Saout [2010]findthat andSene must belessleveraged alongwithhighstaff cost perloan. charged by sustainableMFOs, targeting poorer borrowers tors. Thus, higherinterest mustbe (yieldonloanportfolio) Cost efficiency ismeasuredCost asoperating efficiency expenses/loan Average Loan Size. Average loansize (ALS) istheamount associated withtheoperationalH1: OELPisnegativity self------and positively associated withfinancialsustainability argued that size andloanintensity (ALS) were significantly Hermes, Lensinking ondonorsupport. andMeesters[2011] credit facilitiesto thepoorer rely borrowers withoutfurther [2007] concluded that MFIsmay continue to micro extend associated JohnsonandMhlanga Bogan, withperformance. whilecapital/asset ratio ispositivelyfinancial performance loan loss provision and expense ratio are linked withreduced mance resulted inadequate financialdisclosure.In addition, ontheotherhand, bettercial performance; financialperfor [2019] stated that adequate disclosure improved thefinan ofmicrofinancethe performance institutions. Churchill outreach goal. Later, Quayes [2015]systematically reviewed there would betheongoingneedfor subsidiesto meetthe highlighted that to was reach further thepoorpopulation. It dicating that the MFIsmust forego in order thesustainability existence between two goalsofmicrofinance institutionsin ty. Abate, [2013]confirmed thetrade-off andGetnet Borzaga between outreach andprofitabili the existence oftrade-off measured through OSSandROA, theviewof thusrejecting age loanbalance positively ofMFIs affected theperformance established that depthofoutreach measured through aver gross [Aterido, loanportfolio Iacovone, Beck, 2013]. Ayayi of macroeconomic depends largely factors ontheyield negative effect onprofitability andsustainability. The effect if interest rates are raised beyond the limit, itcould have a to have apositive relationship withprofitability but to alimit; represents an interest rate charged by MFIsandisexpected (OSS)and ROA. tional self-sufficiency were thesignificant determinants of MFIs. expenses/total assets, borrowers perstaffand total assets stated that female borrowers, average loansize, operating affected financial performance. Abdulai and Tewari [2016] argued that women borrowers significantly and positively linked toGonzalez [2007] enhanced financialperformance. of rural lendingandconfirm theefficiency grouplending yield ongross However, loanportfolio). theresults didnot in theimproved (measured through financialperformance and Iacovone [2013]stated that women borrowings resulted socialindicator [Feroze,is animportant 2011].Aterido, Beck ship, theshare offemale borrowers asit cannotbeneglected andStrømMersland [2010]found aninsignificant relation andprofitability ofmicrofinanceability institutions. Whereas Quayes [2016]. The higherrepayment increases thesustain of female by Abdullah customers and hasbeenobserved 2015]. Asimilarpattern ofthehighrepayment performance has a positive effect on the repayment[Ayele, performance dian self-help groups (SHG),female percentage of borrowers associated withhigherrepayment rates [Quayes, In 2012].In women is of MFI, sinceprofitability serving and sustainability borrowers to inMFIsisexpected have on apositive impact erational (OSS)and ROA. self-sufficiency H2: ALS is expected to haveH2: ALSisexpected asignificant ontheop impact MFIs Interest Rate. Yield (interest) (YGLP) onloanportfolio to haveH4: PFBisexpected ontheopera positive impact Percentage ofFemale Borrowers. Percentage offemale Public andMunicipalAdministration ------53 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 54 УПРАВЛЕНЕЦ 2019. Том 10. № 4 on thedegree aversion ofrisk size. andtheportfolio The re profile, dependsonitsrisk portfolio whichismainlybased Microfinance ofMFIs.profitability andsustainability loan received andisassumedto have anegative effectonthe default credit for risk outstandingloansthat are yet to be erational (OSS)and ROA. self-sufficiency yield andallmeasures andprofitability. ofsustainability [2013]alsofoundand Szafarz apositive association between fordable yieldscharged by MFIs. Similarly, D’Espallier, Hudon nificant indicating theaf relationship withthesustainability [2018]found andRana apositive sig [2010],Mia and Sene erational (OSS). self-sufficiency of borrowers. larger number means anincrease by serving insustainability found apositive relationship between ALSandGLP, which between theOSSandALS.Churchill [2019] mission drift the average loansize isusedasdependent variableto see is usedinthethree leastsquare asdependent variable when erature dysplayed mixed results of GLP on ALS. The variable sents thesize ofanMFIsby total loansoutstanding. The lit (OSS). tional self-sufficiency average loanbalance perborrower (ALBG). instrumental variable; itshowed apositive correlation with Johnson andMhlanga[2007],whileusingCPBasan Bogan, Againing nomissiondrift. similarfindings were drawn by found apositive relationship between ALSandCPBindicat ofmanaging costefficiency [Ayele, 2015].Churchill [2019] (OSS)and ROA. tional self-sufficiency nancial sustainability. necessarily by focusingof outreach did not hurt on MFIs fi among them. The results showed that thebreadth anddepth andoutreachcial sustainability andallowed apossiblelink [2013] proposed acomprehensive modelhaving bothfinan at had a negative risk effect on financial sustainability. Tehulu ofMFIs.bility Pimhidzai etal. [2019]suggested that portfolio and PAR>30 days were affectingsustaina themajorfactors that capital-assetratio, operating expenses/loan portfolio 2019]. Tchakoute-Tchuigoua andSoumaré [2019]claimed increasesnance sector macroeconomic Qi, [Knewtson, risks portfolio. inthemicrofiThe deteriorating quality portfolio apositive oftheloan effectonthequality [2018] observed increased profitability andsustainability. ChurchillAwaworyi a credit inorder client worthy to intheportfolio achieve the of the MFIs,ability which indicated that MFIs needed to have significant andprofitrelationship between thesustainability andStrøm [2015],Mersland Saout [2010]found anegative challenging Zetek, development 2016].DaherandLe [Janda, managementrisk methodologyto maintain itsthriving, but cently establishedmicrofinance must explore sector thisnew Государственное имуниципальноеуправление Default Risk. Portfolio Risk. Default at 30 days risk (PAR30) represents H5: YGLP to have isexpected asignificant ontheop impact H8: GLP is expected toH8: GLP is expected have a significant on the op impact Gross Loan Portfolio. to haveH7: CPBisexpected anegative ontheopera impact Cost Per Borrower. Cost perborrower (CPB) measures the to have riskisexpected ontheoperaH6: Default aneffect Gross loan portfolio (GLP)Gross loanportfolio repre ------where, OSSrepresentsROA de operational self-sufficiency; ALS =α profit (Tableprofit 1). CPB iscost perborrower; represents PROFST profit ornot-for stands for gross (size); MFZmeanssize loanportfolio ofMFIs; sponds to outstandingloanspast30days GLP (defaultrisk); sents operating expenses/gross PAR30 loanportfolio; corre YGLP denotes yield (interest) OELPrepre onloanportfolio; outreach); PFBispercent ofwomen borrowers; participation onAssets;notes ALSisaverage Return loan size (depthof mission drift is taking place in Pakistan [Churchill, istaking mission drift 2019; Gon taneous relationship between thetwo andto seeifpossible OSS are used as dependent variables to determine the simul between outreach andsustainability, where bothALSand 3SLS is adopted to determine any simultaneous relationship pendent Johnson,Mhlanga,2007].Lastly, variable[Bogan, as endogenousvariable, whenROA andOSSare usedasde of ALS.CPBisusedasinstrumental variablealongwithALS difference in results keepinginviewtheendogenousnature compared withfixed and random technique to checkany forendogeneity model1and2,theresults are ables, 2SLSregression technique to account for individual and profitability level. The studyadopted instrumental vari ofMFIs,bility ALScould alsobeaffected by thesustainability andprofita ofMFIs)couldobjective affectthesustainability model suffers from endogeneity, since where ALS(aprimary [2007], DaherandLe [2015].Fixed Saout andrandom effect [2018],Gonzalez model hasbeeninspired andRana by Mia keeping in view thepanelnature of current data. Regression the effectofindependent ondependentvariable variables technique following by Hausmantest isusedto determine FixedResearch Design. and random effect with regression Pakistani MFIs. of that affect thefinancialperformance termine thefactors tions. An unbalanced panel dataset of 29 MFIs is used to de contains financialindicatorsIt data ofmicrofinance institu microfinance informationbest globalcross-country provider. Information (Microfinance Exchange),Market whichisthe recent data from 2008–2014. out of48MFIswere takenfor comparative analysis ofmost been eliminated dueto unavailability ofdata. Twenty-nine forbeen selected thecurrent study. However, 18MFIshave NGOs of Pakistan depending on the availability ofdata have zalez, 2007]. RESEARCH METHODOLOGY Model SpecificationsModel Source.Data The data have beengathered from theMIX Size.Sample All microfinance institutions, banksand OSS OSSit =α ROAit =α 0 +δ it + β =α 1 ROA +δ 5 + β PAR30 +β 0 0 +β 0 + γALSβ +β 4 + β PAR30 +β 1 1 ALS +β 5 ALS +β PAR30 +β 2 OSS +β 6 MFZ +β 1 2 5 2 PFB +β PFB +β MFZ +β PFB +β 1 CPB +β 6 MFZ +e 7 PROFST +e PROFST 2 3 3 YGLP +β YGLP+ β 6 YGLP +β PROFST +e PROFST 2 PFB +β it ;(2) 4 3 it 4 OELP + OELP + ;(1) 3 OELP + GLP +e it ;(3) it , (4) ------dom effect models were employed onthedependent vari panel dataset was from collected Fixed MIX Market. and ran fromlected theprevious research studies. The unbalanced purpose, different measures financialperformance were se thepoorer strata. goalinserving flicting To attain thestated becomesif attaining a profitability andsustainability con microfinance institutionsin as well as to determinePakistan of (profitability andsustainability) the financialperformance The studyaimsto investigate thedeterminants that affect anced panel data. The descriptive statistics shows that on av varies across variables,observations whichisdueto unbal 2SLSand3SLS. nique i-e issue by employingendogeneity instrumental variable tech ables since the nature ofdata is panel that later accounts for RESULTS AND DISCUSSION OSS Credit Risk ALS GLP MFZ Size of(MFIs)/ OSS ROA PROFST CPB YGLP PFB Cost Efficiency MFZ GLP CPB PEB ALS YGL ROA PAR30 OPGLP Table 2shows thedescriptive statistics. The numberof Variable Variable Variable Nature Instrumental Independent Independent Independent Independent Independent Independent Independent Endogenous Dependent Dependent 173 171 172 158 173 173 161 156 173 173 Obs portfolio (PAR30) Portfolio at risk past 30 days/the gross loan Log ofgross loanportfolio Natural logoftotalassets Dummy variable – 1 if MFIs are for-profit; otherwise – 0 Yield on loan portfolio and total expenses/total assets % ofFemale borrowers (OELP) Operational expenses/gross loanportfolio Cost perborrower Average loanbalanceperborrower/GNI percapita for loanloss provision + Op.Exp + Exp Revenue/Financial Total assets total average the by divided taxes after income Net Measurement –0.009 –0.043 0.6374 0.3755 0.1523 6.935 6.648 1.610 0.373 0.516 Mean ------Таблица 1–Переменные,прокси-переменныеиихизмерения also depend on financial performance i-e OSS and ROA. OSSand i-e also dependonfinancialperformance could be dependent on the level of outreach, outreach could ed asendogenousvariables, where financialperformance mustbe treatthors findthat ALSandfinancialperformance was treated as endogenous variable. Since a number of au effect models, as twowell as stageleastsquare, where ALS sufficiency, equation 1 wasestimated using fixed and random aimed at investigating thedeterminants ofoperational self- tional self-sufficiency. ficiently. This isoneofthe reasons for notmeetingtheopera indicates that the Pakistani MFIsdonotusetheirassetsef MFIssuffer fromkistani lossmeasured throughROA, which government. The statistics alsodemonstrates that thePa that putstheminto thesituation to getsubsidiesfrom the erage thePakistani MFIsare notoperationally self-sufficient Results variable. withOSSasdependent Since thestudyis Std.Dev 0.731 0.816 0.413 0.346 0.226 0.171 0.004 0.173 0.157 0.327 D’Espallier etal.,2013;Kar, 2012; Abate, Borzaga,Getnet,2014; Abate, Borzaga,Getnet,2014; Kar, 2012;Tchuigoua, 2015 Abate, Borzaga,Getnet,2014;Kar, 2012 Armendáriz deAghion,Morduch, 2000; Kar, 2012 Mersland, Zamore, Djan,Sommeno,2019 Kar, 2012;Ngo,Mullineux,Ly, 2014; Kumar Kar, 2011;Mersland, Strøm,2009 Hartarska, 2005; Hartarska, Nadolnyak,2007; Mersland, Strøm,2009 Mersland, Strøm,2010;Quayes,2012 Quayes, 2015;Tchakoute-Tchuigoua, 2010 Hermes, Lensink, Meesters, 2011 D’Espallier etal.,2013 Bogan, Johnson,Mhlanga,2007 Cull, Demirguç‐Kunt,Morduch, 2007; Bassem, 2012;D’Espallieretal.,2013; Bassem, 2012;KumarKar, 2011; Table 1–Variablemeasurementandproxies Public andMunicipalAdministration Таблица 2–Дескриптивнаястатистика –0.0009 –1.11 4.847 3.894 0.845 Min 0 0 0 0 0 Table 2–DescriptiveStatistics Reference

0.0244 8.382 8.456 3.245 0.194 0.904 0.803 2.87 2.80 Max

- - - - - 55 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 56 УПРАВЛЕНЕЦ 2019. Том 10. № 4 square technique isusedto dealwithendogeneity. technique could bias theresults. Therefore, two stageleast ALS to beanendogenousvariable, andtreating itwithother the panelnature ofdata. However, scientificfind writings dom effect modelshave beenemployed keepinginview However, thenegative coefficient indicates that increasing measuredtainability through operational self-sufficiency. negative insignificant (0.754) relationship withfinancialsus andNadolnyak [2007]. Strøm [2010],Hartarska and [2013], Mersland [2018], Kipesha and Rana ings by Mia nor support. The results showed withthefind consistency alarger numberofpoorclients withtheconstantserve do sets attain andtheyare better sustainability more likelyto reduces their financialsustainability. MFIsholdingmore as that ultimatelywill bemore dependent onsubsidiessupport ents. aPakistani doesnothave firm If enoughassets, they through more collecting depositsfromperformed thecli Pakistan MFIswould improve theirsustainability. could be It ability. The results indicate that increasing the asset size in relationship at 5%significance level withfinancialsustain in Pakistan, asithasapositive andhighlysignificant (0.000) ofmicrofinanceaffects financialsustainability institutions Prob > F=0.000shows thefitnessofmodel. dependent variable (OSS) variables. isdueto theexplanatory dom effect. greater than0.05),therefore, we prefer theresults from ran more preferable, since theprob >chi2=0.5811(P-value was el. The results showed that therandom effectmodel was MFZ ALS PFB PAR30 OELP ALS YGLP PROFST Государственное имуниципальноеуправление To measure thegiven hypotheses, firstly, fixed and ran Table 3provides theresults from therandom effectmod The average loansize given by MFIsisfound to have a The results showed that Size ofMFIsinterms ofassets The value ofR-squared 0.34shows that 34%variation in Variable OSS =α+β Post estimation test ofendogeneity Таблица 3–Сводныерезультатыанализаприоперационнойсамостоятельности(OSS)какзависимойпеременной + β 5 PAR30 +β 1 R ALS +β 2 =34% –/insignificant (0.284) –/insignificant (0.194) +/insignificant (0.884) –/insignificant(0.754) –/significant (0.000) –/significant (0.000) +/significant (0.000) +/significant (0.000) 6 2 MFZ +β PFB β Result Random Effect Model R Effect Random 3 YGLP +β 7 PROFST +e.PROFST (1) 4 OELP + Hypothesis acceptance 2 Stage Least Square Accepted Accepted Accepted Accepted Rejected Rejected Rejected Rejected 2 ------=34%Prob >chi=0.000 ing portfolios. Hence,selection. Pakistani MFIs should be careful when mak wasthat adversely sustainability affected by the portfolio’s her, Le Saout,2015]. The negative coefficient demonstrated sumed to have anegative [Da effectonMFIssustainability for outstandingloansthat are yet to bereceived andisas stani MFIsfor understudy. theperiod represents It credit risk (0.284) effect onoperational incaseof sustainability Paki andStrøment withMersland [2010]. cost toportfolios attain sustainability. The results are consist cost controls for theemployees, MFIsshouldcontrol their cost strategies reduction and, by trainings on conducting of MFIsinPakistan. Microfinance institutionsshouldadopt operating expenses would adversely affecttheprofitability they mustface for theportfolios,representing that increased of Pakistani MFIs. The variable represents theexpenses that tive andsignificant (0.00) relationship withthesustainability results showed with[Ayayi, consistency Sene, 2010]. ofPakistanable market [Abate, 2014]. Getnet, Borzaga, The due to cultural and economic differences and the unpredict amined period. However, theresults could alsobeviolated the ex during determinant ofprofitability andsustainability be the reason why female borrowers remained insignificant and women hardly indulgeintheirown businesses, thiscould society [Gonzalez, 2007].As Pakistan isamale-dominated ity, since better repayment rates are associated withthem positive effectonprofitability andultimately onsustainabil ofPakistaniability MFIs. Female borrowers proved to have a tive onoperational butinsignificant sustain (0.882)impact Tewari [2016],Churchill [2019]. [2018],Abdulai and andRana showed withMia consistency goal a conflicting for MFIsin overPakistan time. The results poorborrowers may andserving notbecomesustainability Participation offemale borrowers alsodisplayed aposi Portfolio atalsofound risk anegative butinsignificant Operating expense over gross hasanega loanportfolio Table 3–ResultssummarywithOSSasdependentvariable Quayes, 2012 – Millson, 2013;Kar, 2012 Quayes, 2012 Hartarska, Nadolnyak,2007;Millson,2013 Abate, Borzaga,Getnet,2013;Bogan,2012; Millson, 2013 Abate, Borzaga,Getnet,2013;Abdulai,Tewari, 2016; Kar, 2012 Abate, Borzaga,Getnet,2013;Kar, 2012 Prob >chi=0.000 P-value =(0.000) Result consistency

------MFIs inPakistan underreview. the period during Yield repre (0.000) relationship with theoperational of sustainability where ALSisendogenousvariable if profit-oriented institutions get more sustainability; how if profit-oriented institutionsgetmore sustainability; [2018]. ment. The results andRana showed withMia consistency apositive throughexerts effectonsustainability timelypay seems to beaffordable to thepoorborrowers, which,inturn, of affecting thesustainability MFIs.Interest Pakistani charged sents the interest charged by MFIs indicating and positively ed values for ALS pendent Johnson,Mhlanga,2007]. variable[Bogan, since CPB would dependonthesize ofloanwithOSSasde as endogenousvariablewithCPBinstrumental variable, gression inorder to seeany difference whenALSistreated stage leastsquare to becompared withrandom effect re disclosure level. ent withAyayi [2010]andChurchill andSene [2019]for lower thananon-profitsustainability one. The results are consist cient shows that afor-profit organization could attain better inPakistan.ing sustainability Furthermore, anegative coeffi didnotprovePROFST to beagooddeterminant for increas ever, theresults remained insignificant, whichsignifies that OSS ALS YGLP ALS PROFST YGLP ALS MFZ PFB PAR30 OELP OSS CPB isusedasinstrumental variableto derive thepredict Yield on gross has a positive loanportfolio significant Lastly, profit status was usedasdummy variable to see The studyalsoestimated coefficients through second it it Variable =α =α it Post estimation test ofendogeneity =α 0 0 +β +β 0 +γALSβ 1 1 CPB +β ALS +β + β + β + β R 2 Таблица 4–Сводныерезультатыанализаприрентабельностиактивов(ROA)какзависимойпеременной =49% 6 5 6 –/insignificant (0.194) –/insignificant (0.184) +/insignificant (0.460) +/insignificant (0.409) MFZ +β MFZ +β MFZ +β –/significant (0.047) –/significant (0.010) –/significant (0.000) +/significant (0.000) +/significant (0.000) 2 2 1 PFB +β PFB +β PFB β Result 7 6 7 2 PROFST +eit. PROFST PROFST +e PROFST +e PROFST YGLP +β 3 FixedModel R Effect 3 YGLP +β YGLP +β 3 OELP +β 4 4 it it OELP +β OELP +β . , Hypothesis acceptance 4 PAR30 + 5 5 Accepted Accepted Accepted Accepted Accepted Rejected Rejected Rejected Rejected PAR30 + PAR30 + 2 Stage Least Square 2

=27%Prob>chi =0.000 ------study alsoaimsto investigate thedeterminants ofROA, be shows theresult of2SLSwithOSSasdependent variable. could alsodependonoutreachperformance level. Table OSS,financial i-e offinancialperformance (ALS) isfunction ALS istreated asendogenousvariable, since where outreach ROA. OSSand i-e could alsodependonfinancialperformance dependsonthelevel ofoutreach,performance outreach should be treated as endogenousvariables, where financial cording to theliterature, ALSandfinancialperformance square, where ALSwas treated asendogenousvariable. Ac using fixed and random effectmodelsas wellas2stageleast her, Le Saout,2015]. Therefore, equation 2was estimated infuture [Da andself-sufficiency ing financialsustainability cause profitability holds greatfor MFIsdemand importance not have sufficient assets, theywillbemore dependent on ing more deposits from the clients. a Pakistani does firm If their profitability.It could beimplemented through collect increasing theassetsize ofPakistani MFIswould improve lationship at 5 % significance level. The results indicate that Pakistan, asithasapositive andhighlysignificant (0.000) re ofmicrofinanceaffects financialperformance institutionsin ables. Prob >F=0.000shows thefitnessofmodel. in dependent variable(ROA) vari isdueto theexplanatory fect. The value ofR-squared 0.27shows that 27%variation than 0.05), therefore, we prefer the results from random ef preferable, since theprob >chi2=0.000(P-value was less The Hausman test showed that random effect model was Fixed results withROA effect asdependent variable. The The estimated results of2SLSare given in Table 3,where The results showed that Size ofMFIsinterms ofassets Table 4provides theresults from thefixed effectmodel. Table 4–ResultssummarywithROAasdependentvariable Daher, Le Saout,2015 Mersland, Strøm,2009 Kar, 2012 – Millson, 2013 Cull, Demirguç-Kunt,Morduch, 2007;Daher, Le Saout,2015 Cull, Demirguç-Kunt,Morduch, 2007,2011 Daher, Le Saout,2015 Daher, Le Saout,2015;Kar, 2012 Abate, Borzaga,Getnet,2013;Kar, 2012; ROA =α Prob >chi=0.000 P-value =(0.000) 0 +β + β Public andMunicipalAdministration 1 ALS +β 5 PAR30 +β Result consistency 2 PFB +β 6 MFZ +e. (2) 3 YGLP +β

4 OELP + ------57 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 58 УПРАВЛЕНЕЦ 2019. Том 10. № 4 where ALSisendogenous variable Ibrahim, Bhuiyan, 2018;Akhtar,Ibrahim, Ali, Sadaqat, 2011]. MFIs over time. The results showed with [Ahmed, consistency borrowers may goal notbecome aconflicting for Pakistani ficient indicatespoor that increasing profitability andserving profitability ofMFIsin However,Pakistan. thenegative coef Bhuiyan, 2018;Daher,Ibrahim, Le Saout,2015]. sustainability. The results showed with[Ahmed, consistency subsidies, whichultimately reduces theirprofitability and size ofloan[Quayes, 2015]withROA asdependent variable. CPB asinstrumental variable, since CPBwould dependonthe difference, whenALSistreated asendogenouswith variable dom effect regression.It shouldbedoneinorder to seeany stage leastsquare given in Table 4to becompared withran son behindthis[Abate, 2014]. Getnet, Borzaga, naturepredictable ofthePakistani isapossiblerea market however, itremained insignificant for MFIs.Pakistani The un ous studiesshowed apositive relationship between thetwo; positive butinsignificant (0.460)effecton profitability. Previ land andStrøm [2010]. [2018],Ayayi andRana withMia [2010],Mers andSene ency thestudiedperiod. during kistan The results showed consist remained aninsignificant determinant ofprofitability in Pa their own businesses. This might bethereason why females andwomen society hardly indulgein is amale-dominated to beagood determinant ofPakistani MFIs. Since Pakistan cant (0.409)indicating that female borrowers didnotprove demonstrate better repayment chances. be carefully checkedandonlythoseclients are selected, who sustainable inthefuture, ofaclient should creditworthiness order portfolios.In to befinancially careful whenmaking Hence, selection. Pakistanithe portfolios MFIsshouldbe The results showed that profitability isadversely affected by have a negative effect on profitability [Daher, Saout, Le 2015]. standing loans that are yet to be received and is assumed to with ROA for Pakistani represents MFIs. It credit for risk out [2010], DaherandLe [2015]. Saout run. The results showed withAyayi consistency andSene hance profitability that would ensure inlong sustainability employees, MFIsshouldmanagetheircosts inorder to en gies and, bytrainings oncosts conducting control for their Microfinance institutionsshouldadopt stratecost reduction would adversely affecttheprofitability ofMFIsin Pakistan. profitability, representing that increased operating expenses strate anegative andsignificant (0.000) relationship with Государственное имуниципальноеуправление Operating expenses over gross demon loanportfolio Average loansize hasaninsignificant (0.184)effecton The studyalsoestimated thecoefficients through second Yield ongross (interest loanportfolio charged) a exerts Participation offemale borrowers alsoremained insignifi PAR30 hasasignificant andnegative relationship (0.047) ROA ALS it it =α =α 0 0 +β +β + β + β 1 1 CPB +β ALS +β 5 5 PAR30 +β PAR30 +β 2 2 PFB +β PFB +β 6 6 MFZ +e MFZ + 3 3 YGLP +β YGLP +β eit it , . 4 4 OELP + OELP +

------(0.000), YGLP (0.021)have (0.000)and PROFST apositive sig of themodels. value =(0.000)andfor bothmodelsshows thefitness respectively, variables. whichisdueto Prob theexplanatory 49 %variation independent variables, namelyOSSandALS value of R-squared (0.2717) and (0.4895) shows 27%and [Daher, Le Saout,2015]. andultimately throughity onsustainability timelypayment borrowers, putsapositive which,inturn, effectonprofitabil Mhlanga [2007]. The results showed Johnsonand withBogan, consistency rowers may goal notbecome aconflicting for MFIs over time. indicates poorbor that increasing profitability andserving ofMFIsinPakistan.ability However, thenegative coefficient enous variable. also remained significant, whenALSistreated asendog mained significant. However, ALS (0.010) and YGLP (0.000) of 2SLSwithROA asdependent variable. also dependontheoutreach level. Table 4shows theresults ROA, could financialperformance i-e financial performance dogenous variable, since where outreach of (ALS) isfunction ed values for ALS ent variables using3SLSregressions. neous equations were tested withOSSandALS asdepend PAR30 remained negative significant (0.012),whensimulta tive significant effect. PFB remained insignificant; however, OELP(0.000)and nificant impact; PAR30 (0.012)have anega were checkedsimultaneouslyusing3SLS. effect oneachother. Therefore, equation 3andequation 4 theirmutual dependent variable alongwithALSto observe variables, namelyGLP, PFBandCPB. OSSwas alsousedas are takenasindependent variablesalongwiththree control poorer population ofthecountry. Therefore, OSSandROA the and profitabilitygoalinserving becomes a conflicting square we thenullhypothesis reject that ALSisexogenous variable. P-value (0.000)signifies that ALSisendogenous variable, and cording to whetherALSistreated asendogenousvariable. OSS Consistent with random effect and 2SLS results, MFZ Table 5provides the results of3stageleastsquare. The The estimated results of2SLS,where ALSistreated asen CPB isusedasinstrumental variableto derive thepredict Post ac estimation isalso performed test ofendogeneity Yield (interest charged) seemsto beaffordable to poor Average loansize hasasignificant (0.010)effecton profit Consistent withfixed effectmodel, MFZandOELP re The studyaimsto investigate ifattaining sustainability between OSSandALSusing3stageleast Interaction it =α ROA ALS =α 0 +γALSβ it =α 0 +δ 0 +γALSβ + β + β 1 ROA +δ 4 5 PAR30 +β MFZ +β + β3GLPe 1 PFB β 1 2 2 PFB β OSS +β 6 YGLP +β PROFST +e PROFST 5 MFZ +e it 2 .(4) YGLP +β 1 CPB +β 3 OELP +β it . it .(3) 3 OELP + 2 PFB + 4 PAR30 +

------indicates that lower costs are associated withsmall-sized cant determinant ofPakistani MFIs. The positive coefficient tionship with ALS, indicating that increasing CPBisa signifi andStrømwith Mersland [2010]. er costs andincrease profitability. The results are consistent loan hasbetter repayment rates, itwillcompensate for high [Gonzalez, 2007;Daher, Le Saout, 2015].However, ifasmaller of MFIsandultimately putanadverse effectonprofitability since smallerloansare more expensive, reduce theefficiency ofsocialoutreach, objective deviate themfrom theirprimary profitability, whichimpliesincreasing theloansize. This will ables. The results show that Pakistani MFIsare eager to attain two between the vari atrade-off ship withALS,depicting withChurchillconsistency [2019]. by smallloansincreases sustainability. The results showed loans are somewhat more expensive, abetter repayment rate increased sustainability. This proves that, althoughsmaller and outreaching thepoor. ALSisfound to beassociated with of enhancing financialmeet performance both objectives poor strata for under review the period and it is possible to serving the with doesnot conflict erational self-sufficiency with the average loansize. This indicates that attaining op that OSShadanegative andsignificant (0.035) relationship ofPakistani thestudiedperiod.ability MFIsduring andultimatelycan bolster enhance theperformance sustain negative coefficient poor individuals indicates that serving may goal. notbecomesustainability aconflicting Even the poorandattaining that serving ship withOSS,depicting MFZ PFB GLP ROA OSS PROFST YGLP PFB PAR30 OELP ALS CPB ALS demonstrated a negative significant (0.000) relation Cost per borrower hasapositive significant (0.000) rela ROA displays apositive andsignificant (0.006) relation The results with ALS as dependent variable showed Variable R где среднийразмерзайма(ALS)иоперационнаясамостоятельность(OSS)–зависимыепеременные 2 =49% +/insignificant (0.570) –/significant (0.012) –/significant (0.035) –/significant (0.012) –/significant (0.000) –/significant (0.000) +/significant (0.021) +/significant (0.004) +/significant (0.006) +/significant (0.000) +/significant (0.000) +/significant (0.000) Таблица 5–Результатыанализаспомощьютрехшаговогометоданаименьшихквадратов(3SLS), Result ALS R2=49%Prob>chi =0.000 OSS R Table 5–Resultsusing3SLS,whereALSandOSSaretreatedasdependentvariables 2 Hypothesis acceptance =27%Prob>chi =0.000 ------Accepted Accepted nancial sustainability andprofitability ofMFIs in nancial sustainability Pakistan. the poorer strata. attaining profitability goalinserving becomes a conflicting crofinance institutionsin as well as to determinePakistan, if ofmi (profitability andsustainability) financial performance The studyaimsto investigate the determinants affectingthe Churchill [2019]. forlected theirloanportfolio. The results are consistent with in repayments; therefore, creditworthywomen shouldbese decreased andprofitability due to theirdelay sustainability [2019]. Furthermore, women borrowers are thereason for borrowers. The results showed with Churchill consistency outreach increases inthenumberoffemale witharise increase theoutreach. As women are proved to bepoorer, moreers withoutreach women states would that serving sistent withChurchill [2019]. the level ofoutreach to poorborrowers. The results are con amount oflendablefundsto customers andultimately lower customers canbeargued reduceoutreach. that risky It the borrowers’ is not suitablewhile decreasing portfolios their onoutreach.tive impact The results of show that selection (0.004) relationship withoutreach, anega whichreflects Churchill [2019]. socialobjective. mary The results showed with consistency incurs lower costs andhelpsPakistani MFIsto fulfilltheirpri Therefore, poorborrowers, Pakistani MFIsshouldserve asit loans that are standardized and require lessmonitoring. CONCLUSION – – – – – – – The results showed that thesize ofassetsincreased fi The negative significant association of female borrow demonstratesGross loanportfolio apositive significant Abate, Borzaga,Getnet,2013;Bogan,2012; Quayes, 2012 Quayes, 2012 Quayes, 2012 – Millson, 2013;Kar, 2012 Abate, Borzaga,Getnet,2013;Kar, 2012 Millson, 2013 Millson, 2013 Tewari, 2016;Quayes,2012 Hartarska, Nadolnyak,2007;Millson,2013 Quayes, 2012 Quayes, 2012 Abate, Borzaga,Getnet,2013;Abdulai, Prob >chi=0.000 Public andMunicipalAdministration Result consistency

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59 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 60 УПРАВЛЕНЕЦ 2019. Том 10. № 4 Akhtar M.F.,Akhtar Sadaqat S.,2011.Factors Ali K., influencingtheprofitability ofIslamicbanks International Pakistan. Ahmed I.,Ibrahim Y., Bhuiyan A.B. (2018).Microfinance Member States–DoesRegulation intheOIC Sta- Performance Cull R.,Demirguç-Kunt A.,Morduch J. (2007).Financial andoutreach: Aglobalanalysis performance ofleadingmicro Empirical EconomicsChurchill and outreach: S.A.(2019).Microfinance, financial sustainability is there a trade-off? Bogan V., Johnson W., Mhlanga N. (2007). Ayele G.T. (2015).Microfinance institutionsin Ethiopia, Kenya andUganda: Loan outreach to thepoorandquest Ayayi M.(2010). A.G.,Sene What drives microfinance institution’s financialsustainability. TheofDeveloping Journal Awaworyi Churchill and depthof outreach: S. (2018). Sustainability Evidence from microfinance institutions in Sub- Aterido R.,Beck T., Iacovone L.(2013).Access to isthere financeAfrica: inSub-Saharan agendergap?World Develop inmicrofinance B., A. (2011).Onmissiondrift Armendáriz institutions.In: Armendáriz Szafarz B., LabieM.(eds.) for of2008–2014.Small-sizes theperiod loansare associ the poor borrowers(OSS) with servicing does not conflict (PAR30)portfolios selection. also showed was adversely that sustainability affected by the andprofitability throughability timelypayment. The results borrowers, puts a positive which, in turn, effect on sustain (interestportfolio charged) seemsto beaffordable to poor should adopt cost strategies. reduction Yield on gross loan ity. Therefore, inorder to befinanciallysustainable, they and which affects their financial sustainability profitabil Pakistani microfinance institutionsare not cost-efficient, Abdulai A., Tewari D.D. ofmicrofinanceSub-SaharanAfrica: a stochastic institutionsin (2016).Efficiency frontier ap Abate G.T., Microfinance Outreach and Institutions: (2014).Cost‐Efficiency of K. C.,Getnet Borzaga andthe Trade‐Offs Abate G.T., (2013).Financial andoutreach ofmicrofinance K. sustainability C.,Getnet institutionsin Borzaga Ethiopia: was considerably lower 2000s. inthe early With thepurpose interest rate for microfinance loansis at around 35%,which tive ofsocialoutreach. Nowadays, inPakistan, theminimum the loansize. objec This willdeviate themfrom theirprimary MFIs are eagerto attain profitability, whichimpliesincreasing number ofwomen borrowers. The results show that Pakistani are found to bepoorer, outreach increases inthe witharise ing more women would increase theoutreach. As females suitable in Pakistan, since it decreases the outreach. Servic ated withlower borrowers’ costs. Selecting isnot portfolios Ahmad U. (2011). Abdullah S.,Quayes women S.(2016).Do borrowers Economics ofMFIs?Applied , augment financialperformance Cull Regulation, R., Demirgüç-Kunt competitionandfinancing. A.,Morduch J. (2011).Microfinance trade-offs: Государственное имуниципальноеуправление tus Matter?. DOI:10.2139/ssrn.3278426. SSRNElectronicJournal Germany. banks. pp. 1–22. DOI: 10.1007/s00181-019-01709-1. tions? Available at: https://pdfs.semanticscholar.org/67d8/3ce37b962edcbfa40469e435c8093f0f90c3.pdf. for financialviability. African Review,vol. Development 27(2),pp. 117–129.DOI:10.1111/1467-8268.12128. , vol.Areas 44(1),pp. 303–324.DOI:10.1353/jda.0.0093. Saharan Africa. ment, vol. 47,pp. 102–120. DOI:10.1016/j.worlddev.2013.02.013. ofmicrofinanceThe handbook . UK: World Scientific. Pp. 341–366. Research ofFinance Journal andEconomics, vol. 66,pp. 1–8. 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M.A., Rana Mia yieldof microfinanceWhat affects portfolio institutions? Evidence from Bang- yield. Meyer J. Applied ofportfolio ofmicrofinance (2019).Outreach andperformance institutions:theimportance R.,StrømMersland R.Ø. World (2010).Microfinance missiondrift? , vol. Development 38(1),pp. 28–36.DOI:10.1016/j. Mahmood T., Evidence from S.A.(2012).Public Developing Country. Sustainability: Rauf Debt Pakistan Economic Lützenkirchen C., Weistroffer C.,Speyer crisisandadvancement between B. (2012).Microfinance inevolution:An industry . J.Ledgerwood withthepoor. (1999).Sustainablebanking An Institutionaland MicrofinanceFinancial handbook. - Perspec for H.,QiH.(2019).Managingrisk sustainablemicrofinance.Knewtson Finance TheofRisk Journal , vol. 20(1),pp. 2–13. E.F.Kipesha (2013).Performance ofmicrofinance institutionsin Tanzania: integrating financialandnonmet Evidence usingpaneldata from Bangladesh.The World S.R.(2005).Microfinance andpoverty: Khandker BankEco have capitalandfinancingstructure (2012).Does any A.K. Kar relevance ofmicrofinance to theperformance institu- ZetekJanda K., P. (2016).Macroeconomic influencinginterest factors rates ofmicrofinance institutionsinthe Latin Islam N.(2009).CanBy how microfinance much andhow? DESA reducepoverty? and economic insecurity Working Paper Hudon M., Traca D. of subsidiesinmicrofinance:effects inquiry. (2011).Ontheefficiency Anempirical World Develop M.A. (2016). FinancialHossain M.S., Khan of microfinance sustainability institutions (MFIs) of Bangladesh. N.,Lensink ofmicrofinanceHermes R.,MeestersA.(2011).Outreach institutions. andefficiency World, Development V.,Hartarska Nadolnyak D. regulated (2007).Do microfinance institutionsachieve andoutreach? better sustainability drivers of microfinance A.(2007).Efficiency Gonzalez institutions (MFIs): The operating case of bul- costs.Microbanking Feroze (2011).Factors K. R.,Kadian S.,ChauhanA.,Malhotra influencing group inHary repayment performance Dunford M.(2003). Theorizing regional andthechanging territorialdivisionoflabour. economic performance Daher L.,Le E. Saout (2015). ofmicrofinanceThe determinants ofthefinancialperformance institutions:impact B., A.(2013).UnsubsidizedD’Espallier microfinance Hudon M., Szafarz institutions. Economics Letters, vol. 120(2), vol. 44(26),pp. 3421–3433. DOI:https://doi.org/10.1080/00036846.2011.577016. Welfare: note. Cambodia policy Working Paper No. 128266. of International development, vol. 28(2),pp. 281–302. 1299. 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61 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 62 УПРАВЛЕНЕЦ 2019. Том 10. № 4 Quayes of microfinance S. (2015). Outreach and performance institutions:a panelanalysis. Tucker G.(2004).Financial ofmicrofinance M.,Miles of performance institutions:a re comparison to performance Tehulu T.A. of microfinance (2013).Determinants offinancialsustainability institutions inEast European Africa. Journal Tchakoute-Tchuigoua H.,Soumaré I.(2019). The effectofloanapproval decentralization onmicrofinance institu- Государственное имуниципальноеуправление hotmail.com. Ф. Наз,С.Салим, Р. Ур микрофинансовых институтов Пакистана Детерминанты финансовой устойчивости Rizwan Muhammad Ishfaq Ramiz ur Sarah SALIM Farah NAZ Abdulai A., Tewari D.D. ofmicrofinanceSub-SaharanAfrica: a stochastic institutionsin (2016).Efficiency frontier approach. Abate G.T., Microfinance Outreach and Institutions: (2014).Cost‐Efficiency of K. C.,Getnet Borzaga Role andthe Trade‐Offs Abate G.T., (2013).Financial and outreach K. of microfinance sustainability C.,Getnet institutions in Borzaga Ethiopia: does PhD, PhD, Master of Philosophy, Lecturer.Kinnaird Collegefor Women Master Ссылка для цитирования: 29марта2019г. статьи: поступления Дата JEL Classification:H83,D78,G38 микрофинансирование; клиентов; охват рентабельность; микрофинансовое учреждение;Пакистан. устойчивость; управление; государственное слова: Ключевые это авторов, данным По первое исследованиерынкамикрофинансовыхуслугПакистана, выполненноеспомощью2SLS- и3SLS-методов. МФИ. деятельности эффективность определяющих факторов, основных выявлению по менеджерам миссии МФИ, поскольку работа с населением обеспечивает им прирост финансовых показателей. В статье даны рекомендации рисковых портфель эффективность, экономическая кредитов, размер, средний размер займа и их доходность кредитного портфеля. являются В ходе исследования Пакистане, не выявлено признаков в отклонения от МФИ деятельность хозяйственную на методов 2SLS с и 3SLS (двух- и трехшаговый метод наименьших квадратов). Установлено, что основными период факторами, влияющими за Пакистана организаций микрофинансовых 29 2008 по 2014 г. для В статье используются модели с фиксированными и случайными эффектами с учетом эндогенности при помощи Market данные MIX составляют информации исследования финансовой базу провайдера Информационную мирового населения. слоям бедным услуг финансовых предоставлении при дальнейшее их вопрос – под Пакистана МФИ прибыльности и устойчивости. Исследование ставит также ставит показатели задачу установить, станет ли уровень этих финансовые показателей что препятствием на прибылей, влияющих детерминант, основных падающих анализу проблемой посвящена Статья с существование. столкнулись время настоящее в которые (МФИ), из институтов микрофинансовых Одним деятельность является населения неблагополучием план. финансовым с борьбы первый способов возможных на вышел стране в бедности вопрос независимости Пакистаном обретения момента С Аннотация. DOI: 10.29141/2218-5003-2019-10-4-5 PhD, финансовых институтовПакистана//Управленец. 2019.Т. 10. № of BusinessandManagement,vol. 5(17),pp. 152–158. res.2018.09.021. tions’ outreach quality. and loan portfolio ofBusinessResearch Journal , vol. pp. 94(C), 1–17. DOI: 10.1016/j.jbus- vol. 47(18),pp. 1909–1925.DOI:https://doi.org/10.1080/00036846.2014.1002891. gional commercial banksby geographic regions. ofMicrofinance/ESR Journal Review,vol. 6(1),pp. 41–54. Ghana Journal of Development Studies,vol. ofDevelopment Ghana Journal 13(2), pp. 117–139.DOI:http://dx.doi.org/10.4314/gjds.v13i2.7. of Ownership. ofInternational, vol. Journal Development 26(6),pp. 923–932.DOI:10.1002/jid.2981. organizational formmatter? Euricse Working Papers 1356.DOI:http://dx.doi.org/10.2139/ssrn.2288627. Assistant Professor.Assistant Assistant Professor.Assistant Associate Professor.Associate ALI of Philosophy, Lecturer. REHMAN AHMAD The The Реман, М.И.Ахмад,Р. Али The University University

Kinnaird University Наз Ф., Салим С., Реман Р. Ур, Ахмад М.И., Али Р. Детерминанты финансовой устойчивости микро of of College (1-Km Raiwind Road, Lahore, Punjab, 54000, Pakistan). E-mail: [email protected]: Pakistan). 54000, Punjab, Road,Lahore, Raiwind (1-Km Lahore Lahore of (1-Km Raiwind Road, Lahore, Punjab, 54000, Pakistan). E-mail: ramiz_rehman@ E-mail: Pakistan). 54000, Punjab, Lahore, Road, Raiwind (1-Km Lahore Information abouttheauthors for (1-Km Raiwind Road, Lahore, Punjab, 54000, Pakistan). E-mail: [email protected]. E-mail: Pakistan). 54000, Punjab, Lahore, Road, Raiwind (1-Km

Women (93 Jail Road, Lahore, 54000, Pakistan). E-mail: [email protected]. Источники (93Jail Road, Lahore, 54000,Pakistan). 4. С. 51–64.DOI:10.29141/2218-5003-2019-10-4-5.

Applied EconomicsApplied , - -

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Evidence usingpaneldata from Bangladesh.The World S.R.(2005).Microfinance andpoverty: Khandker BankEconomic have capitalandfinancingstructure (2012).Does any A.K. Kar relevance ofmicrofinance to theperformance institutions? ZetekJanda K., P. (2016).Macroeconomic influencinginterest factors rates ofmicrofinance institutionsinthe Latin America Islam N.(2009).CanBy how microfinance much andhow? DESA reducepoverty? and economic insecurity Working Paper Hudon M., Traca D. ofsubsidiesinmicrofinance:effects inquiry. 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63 UPRAVLENETS/THE MANAGER 2019. Vol. 10. No. 4 64 УПРАВЛЕНЕЦ 2019. Том 10. № 4 Государственное имуниципальноеуправление Tucker G. (2004). Financial ofmicrofinanceM., Miles of performance institutions: a regionalcomparison to performance Tehulu T.A. ofmicrofinance (2013).Determinants offinancialsustainability institutionsinEast European Africa. Journal Tchakoute-Tchuigoua H., Soumaré I.(2019). The ofloan effect approval decentralization on microfinance institutions’ out Quayes ofmicrofinance S.(2015).Outreach andperformance institutions:apanelanalysis. Economics Applied , vol. 47(18), Quayes ofoutreach ofmicrofinance S.(2012).Depth andfinancial sustainability institutions. Economics Applied , vol. 44(26), Pimhidzai O., Tong Anantavrasilpa,R., K., S.,Eduardo Popovic M.(2019). S., Martin A.,Mel Pedrini M.,Bramanti V., M.,Ferri microfinance Minciullo L.M.(2016).Rethinking for developed countries. of Interna Journal Oliveira Leite R.de, Santos L.das, Mendes Sacramento L.C.(2019). To profit ornot to profit? Assessingfinancialsustain Nyamsogoro G.D. (2010).Financial ofrural sustainability microfinance institutions(MFIs)in Tanzania. Dr. econ. sci.diss., M.,Kretzschmar G.,FedhilaNurmakhanova H.(2015). andoutreachTrade-off between financialsustainability ofmicrofi Navajas S.,Schreiner M., Meyer R.L.,Gonzalez-Vega J. (2000).Microcredit C.,Rodriguez-Meza andthePoorest ofthePoor: Morduch J. (2000). The microfinance schism.World, vol. Development 28(4),pp. 617–629. H.F.Millson and outreach: theexperience sustainability of between commercial microfinance (2013).The trade-off institutions. M.S.(2018). M.A.,Rana Mia yieldofmicrofinanceWhat affectsportfolio institutions? Evidence from Bangladesh.African Jour АХМАД Мухаммад Ишфак РЕМАН Рамиз Ур Сара САЛИМ НАЗ Фара yield. EconomMeyer J. Applied ofportfolio ofmicrofinance (2019).Outreach andperformance institutions:theimportance Ризван АЛИ kinnaird.edu.pk. Доктор Доктор Магистр философии, преподаватель. Колледж дляженщин Кинерд (54000,Пакистан, Лахор, Джейл Роуд, 93). Магистр commercial banks by geographic regions. ofMicrofinance/ESR Journal Review,vol. 6(1),p. 41–54. of BusinessandManagement,vol. 5(17),pp. 152–158. quality.reach andloanportfolio ofBusinessResearch Journal , vol. pp. 94(C), 1–17.DOI:10.1016/j.jbusres.2018.09.021. pp. 1909–1925.DOI:https://doi.org/10.1080/00036846.2014.1002891. pp. 3421–3433.DOI:https://doi.org/10.1080/00036846.2011.577016. note. Cambodia policy Working Paper No. 128266. tional development, vol. 28(2),pp. 281–302. https://doi.org/10.1002/ijfe.1718. outcomesability ofmicrofinance institutions. International of Finance Journal & Economics, vol. 24(3),pp. 1287–1299.DOI: University ofGreenwich. nance institutions. Eurasian Economic Review,vol. 5(2),pp. 231–250.DOI:10.1007/s40822-015-0016-7. andEvidence fromTheory World Bolivia. , vol. Development 28(2),pp. 333–346. Dr. econ. sci.diss. nal ofScience, Technology, Innovation, vol. andDevelopment 10(3),pp. 345–353.DOI:10.1080/00036846.2017.1397852. , vol.ics 51(2),pp. 1–18.DOI:10.1080/00036846.2018.1564016. Доктор философии, доцент. философии, доцент. философии, доцент. философии, преподаватель. философии, Университет Университет Университет Колледж Лахора (54000, Пакистан, Пенджаб, Лахор, Райвинд Роуд 1-Км). E-mail: [email protected]. Лахора Лахора (54000, Пакистан, Пенджаб, Лахор, Райвинд Роуд 1-Км). E-mail: [email protected]. (54000, Пакистан, Пенджаб, Лахор, Райвинд Роуд 1-Км). E-mail: [email protected]. для Информация обавторах женщин (54000, Пакистан, Лахор, Джейл Роуд, 93). E-mail: farah.naz@ E-mail: 93). Роуд, Джейл Лахор, Пакистан, (54000, Кинерд Microfinance andHousehold Welfare: ------