FINANCIAL SUSTAINABILITY OF MICROFINANCE INSTITUTIONS IN NEPAL

Abstract

The primary aspect of microfinance sustainability is undoubtedly the financial sustainability of microfinance institutions. It refers to an MFI's capacity to finance all of its expenses out of its own operating income (Thapa et al., 1992), independent of outside assistance or financial support. Dunford (2003) further defines financial sustainability as the capacity to continue pursuing microfinance goals in the absence of ongoing donor funding. The ability to rely on self-operation is the main focus of these definitions. The definitions also suggest that the microfinance operations may generate a profit.