Evaluating the Self-sustainability of Micro-finance Institutions (MFIs) Using the Balanced Scorecard Approach (BSc)

This study evaluates the performance of Yemeni MFIs and identifies factors that influence MFI financial sustainability. It categorizes these factors using the balanced scorecard approach that includes financial, customer, internal business process, and learning and growth perspectives.

The study finds that only 12.5 percent of Yemeni MFIs have reached financial sustainability, and only 50 percent have reached operational sustainability. Study findings reveal that:

• Yemeni MFIs are weak in terms of productivity, use of effective funding sources, efficiency and revenue growth strategies;
• MFIs want more support from the government, community and clients;
• MFIs have not focused on rural areas;
• Microfinance awareness campaigns among the poor are insufficient;
• MFIs need to enhance capacities.

The study recommends the enhancement of strategic alliances that contribute to reduction of capital cost and help in increasing outreach, revenues and capacity building. It also recommends:

• Better research, design and performance management tools in order to strengthen organizational performance;
• Stakeholder support to MFIs social mission;
• Campaigns to increase awareness of microfinance services.