Determinants of Financial Sustainability of Microfinance Institutions in Ethiopia

Proletarian of people in mounting countries have been given right to use to formal financial services through microfinance lineups. There is no single definition of the word Financial Sustainability. Therefore, this study was conducted to fill this gap. From the total of thirty four MFIs which are operating in the country and fifteen MFIs have been selected for the study by way of a purposive sampling technique. This study is based on quantitative research approach using statistics panel data analysis and multiple regression model and Audited Financial statement data for eight years are collected by using secondary data from National bank of Ethiopia, from the annual bulletin of AEMFI and mix-market database. The study used STATA version 17.0 to conduct analysis. The study shows that MFIs in Ethiopia at the period financially not self-sufficient. As a result Researcher recommends that to make sustainable MFIs in Ethiopia should have increases yield gross loan portfolio, and inception that increases return on assets habit for in sources then serving the borrower at lower possible expenses and add the value of return on assets rather than grant finance that funding donation from NGOs and regional government and minimize cost per borrower that increases sustainability of Financial Sustainability.