Poverty reduction and donor funds: comparative appraisal of MFIs

Abstract

The study investigates the critical appraisal of poverty reduction and donor funds for mature, middle-aged, and young MFIs. The research adopts a quantitative approach with balanced panel data of 29 Ethiopian MFIs for ten years from 2010 to 2019. The Hausman test was applied in the OLS regression model to analyse the relationship between poverty reduction indicators and donor funds. The findings reveal that the young MFIs top the list where poverty reduction indicators influence donor funds. Mature MFIs top the list in terms of willingness to pay the loan. Young MFIs have clients making maximum savings contributing to the donor funds. The mature MFIs contribute towards increasing the donor funds in terms of increasing portfolio size. The study concludes that young MFIs top the list of maximising donor funds while achieving poverty reduction goals, followed by middle-aged and mature MFIs.