Determinants of financial sustainability for microfinance institutions: lessons for Islamic microfinance banks in Nigeria

Abdullahi, Abdurrahman and Othman, Anwar Hasan Abdullah (2020) Determinants of financial sustainability for microfinance institutions: lessons for Islamic microfinance banks in Nigeria. In: International Conference on Islamic Social Finance: Pandemic Crisis and Possible Solutions (ISFPCPS 2020), 29th -30th September 2020, Gombak, Kuala Lumpur. (Unpublished)

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Abstract

Islamic microfinance institutions play a major role in the provision of financial services to the poor and underprivileged through non-interest, equity-based products and services. To achieve these critical objectives, however, they need to be financially sustainable, which is threatened by the current economic and financial crisis caused by the Covid-19 pandemic. The objective of this paper is to review the determinants of financial sustainability of microfinance institutions with a view to draw lessons for Islamic microfinance banks in Nigeria. The paper utilized the literature review methodology to synthesize research finding in the area. The review revealed that the major determinants of financial sustainability of microfinance institutions are capital structure, asset size and financial innovation. Others are good risk management and corporate governance frameworks. The paper thus recommended that Islamic microfinance institutions in Nigeria should maintain a robust capital structure that relies more on equity, a lean but diversified Board, and utilize more technology-based services. Most importantly, they should emphasize profit and loss sharing principles in their operations.

Item Type:	Conference or Workshop Item (Slide Presentation)
Additional Information:	8713/84659 - Online via Zoom
Uncontrolled Keywords:	Financial sustainability, microfinance institutions, Islamic microfinance, banks, Nigeria
Subjects:	BPH Islamic Economics H Social Sciences > HB Economic Theory > HB126.4 Islamic Economics H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Asst.Prof Anwar Hasan Abdullah Othman
Date Deposited:	12 Nov 2020 11:42
Last Modified:	16 Nov 2020 14:45
URI:	http://irep.iium.edu.my/id/eprint/84659

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