| dc.description.abstract | A microfinance institution is a financial institution that is involved in provision of small scale financial services to low income people. About 4 billion people worldwide live on less than US$2 per day and poverty is one of the major problems in the world. The concept of microfinance successfully works and the poor people have proved to be viable customers. However, there is sufficient empirical evidence that most of these MFIs are unsustainable as evidenced by high levels of credit risk to members, poor quality loans,limited and or inadequate capitalization,operational inefficiencies, higher incidences of non-performing loans, higher levels of liquidity risk, among others. Although these are mentioned as constraint areas affecting MFIs sustainability, they are based on a few studies and non-elaborate methods to generate sufficient conclusions.This study was therefore an extension of the studies undertaken on the factors that determine the sustainability of MFIs with a view of generating sufficient information on the influence of performance of various products on financial sustainability of micro-finance institutions in Imenti North Sub- County, Meru County, Kenya. This study employed the alternative theory (pecking order theory). This study adopted
descriptive design.The target population was 33 respondents. The study sampled 30 respondents. This study used structured questionnaires as research instrument. Data was analyzed using SPSS version 21 as a tool of analysis. Descriptive statistics such as frequencies, percentages, means and standard deviation was used. Inferential statistics were also used to test the level to which individual revenue products influences the sustainability of MFLs. It was further established that returns on short term loans such as emergency loans, education loans, farming loans, micro loans, salary advance and insurance premium financing. It was established that MFIs carry out thorough analysis of short term loans are significantly correlated to the total short term loans. The results indicated that MFIs offer long term loans such as asset financing, construction loans, mortgages, check off loans and term loans secured. It was established that all long term loans are full secured. It also emerged that some MFLs ensure repayment compliance via maintaining clients' salary accounts, offering affordable loans at considerable rates and networking regularly with business community. The results also indicated that the firms only incurred lower costs of collecting demand deposits.All respondents unanimously stated that their firms utilize demand deposits for lending. The results indicated that earnings on product of demand deposits are significantly correlated to the total demand deposits. It was established that only not all MFLs that collect demand deposits collect term deposits. All the respondents unanimously stated that their firms utilizes term deposits for lending and investing in real estate ventures. The results indicated that earnings on demand deposit are significantly correlated to the total term deposits. Based on the results it was concluded that: returns on short term loans are significantly correlated to the total short term loans, returns on long term loans are significantly correlated to the total short term loans, returns, earnings on demand deposit are significantly correlated to the total demand deposits; and earnings on term deposits products are not significantly correlated to the total term deposit. | en_US |
