Local Government Investment Outreach and Sustainability of Microfinance Institutions: A Case Study of Buro, Bangladesh

The Journal of Social, Political, and Economic Studies 34 (3), 318-346, Fall 2009

19 Pages Posted: 5 Jan 2014

See all articles by Mostafa Monzur Hasan

Mostafa Monzur Hasan

Macquarie University

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Mohammad Riaz Uddin

Marshall University - Lewis College of Business

Date Written: 2009

Abstract

When the world is fighting against poverty and hunger, a new concept has emerged in the last couples of decades as Microfinance that prove loan to marginal and underprivileged people. Considering the nature and field of operation including increasing requirements, the outreach and sustainability have become prominent success factor for microfinance institutions. Outreach and sustainability indicate wide range of services and long term existence not only in quantity but also in quality improvement. This study deployed Sustainability Dependency Index (SDI), Sustainability Dependency Ratio (SDR) and Efficiency and Subsidy Intensity Index (ESII) techniques to measure the sustainability of Buro (Bangladesh Unemployed Rehabilitation Organization), a prominent microfinance institution of Bangladesh. From the analysis, Buro has been found to progress towards achieving outreach and sustainability from 2001 to 2005, and then this trend deteriorates in 2006 and 2007. The study reveals that microfinance institutions should concentrate on enhancing financial efficiency and reducing reliance on subsidies. As the urge for micro credit is increasing day by day, microfinance institutions still have lots of opportunities to put more emphasize on outreach and sustainability factors. This study on Buro shows ongoing trend and connotations for overall microfinance market in Bangladesh.

Keywords: Outreach, Sustainability, Microfinance Institutions, Micro Credit, Savings Mobilization

Suggested Citation

Hasan, Mostafa Monzur and Hassan, M. Kabir and Uddin, Mohammad Riaz, Local Government Investment Outreach and Sustainability of Microfinance Institutions: A Case Study of Buro, Bangladesh (2009). The Journal of Social, Political, and Economic Studies 34 (3), 318-346, Fall 2009, Available at SSRN: https://ssrn.com/abstract=2374616

Mostafa Monzur Hasan (Contact Author)

Macquarie University ( email )

Level 3, Building 4ER,
Sydney, NSW 2109
Australia

HOME PAGE: http://https://researchers.mq.edu.au/en/persons/mostafa-hasan

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

Mohammad Riaz Uddin

Marshall University - Lewis College of Business ( email )

400 Hal Greer Boulevard
Huntington, WV 25755
United States

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