Microfinance institutions contribute a lot in reduction of poverty by providing access to finance... more Microfinance institutions contribute a lot in reduction of poverty by providing access to finance to the poor's. The purpose of this paper is to identify those factors that have significant impact on financial sustainability of microfinance institutions in Pakistan. Panel data analysis is used as a technique to analyze the data of 49 MFIs in Pakistan. The results show that Size of MFIs, Capital to Asset ratio, Yield on Gross Portfolio, Operating Expense to Asset ratio and Portfolio at Risk are found to be important factors in determining financial sustainability of MFIs in Pakistan. However, Breadth of Outreach, Cost per borrower, Capital structure, Productivity and Debt to Asset ratio shows insignificant impact on financial sustainability that means these variables have no significant association with finacial sustainability of microfinance institutions in Pakistan. INTRODUCTION This research paper is to analyze those factors that are affecting the financial sustainability of Microfinance Institutions (MFIs) in Pakistan. Financial sustainability of microfinance institutions is probably the key dimension of microfinance sustainability. It refers to the ability of MFIs to cover all its costs from its own generated income from operations without depending on external support or subsidy. In this study, Depth of Outreach, Cost per Borrower, Size of MFIs, Capital Structure, Capital to Asset ratio, Yield on Gross Portfolio, Operating Expense to Asset ratio, Productivity, Portfolio at Risk and Deposit to Asset are used to analyze the effect of these on financial sustainability of MFIs. Poverty is the main issue all over the world especially in under developed and developing countries. Banks and the governments of the countries make efforts to reduce the
The trend of investing in stock markets is increasing rapidly as they were considered as best opp... more The trend of investing in stock markets is increasing rapidly as they were considered as best opportunity for gaining significant returns in most of the developing countries. However in times of financial crisis 2008 when the most of the stock exchanges were crashed, then oil, gold and other commodity investments gain popularity and are considered as safe investments and many investors diversify their portfolios in these alternatives. This study is aimed to investigate the relationship among different types of commodity indices such as metals, crude oil, agriculture, food and beverages and fuel and non-fuel and stock market returns in Pakistan for the period of February 1995 to December 2016 using ARDL approach. Our results suggest that metal, food and beverages and crude oil indices have positive relationship with KSE 100 index returns in long run while fuel and non-fuel commodity indices have negative relationship with stock market returns in long run. The short run results shows that metal, food and beverages, crude oil and agriculture commodity indices have positive relationship with KSE 100 index returns in short run, whereas fuel and non-fuel indices are negatively associated with Pakistani stock market returns in short run. The results of this study can be beneficial for the policy makers, Government, foreign and local investors of Pakistan because this gives a guideline to the investors for their portfolio diversification and for gaining more investment opportunities by investing in different types of commodities or KSE 100 index in Pakistan.
Microfinance institutions contribute a lot in reduction of poverty by providing access to finance... more Microfinance institutions contribute a lot in reduction of poverty by providing access to finance to the poor's. The purpose of this paper is to identify those factors that have significant impact on financial sustainability of microfinance institutions in Pakistan. Panel data analysis is used as a technique to analyze the data of 49 MFIs in Pakistan. The results show that Size of MFIs, Capital to Asset ratio, Yield on Gross Portfolio, Operating Expense to Asset ratio and Portfolio at Risk are found to be important factors in determining financial sustainability of MFIs in Pakistan. However, Breadth of Outreach, Cost per borrower, Capital structure, Productivity and Debt to Asset ratio shows insignificant impact on financial sustainability that means these variables have no significant association with finacial sustainability of microfinance institutions in Pakistan. INTRODUCTION This research paper is to analyze those factors that are affecting the financial sustainability of Microfinance Institutions (MFIs) in Pakistan. Financial sustainability of microfinance institutions is probably the key dimension of microfinance sustainability. It refers to the ability of MFIs to cover all its costs from its own generated income from operations without depending on external support or subsidy. In this study, Depth of Outreach, Cost per Borrower, Size of MFIs, Capital Structure, Capital to Asset ratio, Yield on Gross Portfolio, Operating Expense to Asset ratio, Productivity, Portfolio at Risk and Deposit to Asset are used to analyze the effect of these on financial sustainability of MFIs. Poverty is the main issue all over the world especially in under developed and developing countries. Banks and the governments of the countries make efforts to reduce the
The trend of investing in stock markets is increasing rapidly as they were considered as best opp... more The trend of investing in stock markets is increasing rapidly as they were considered as best opportunity for gaining significant returns in most of the developing countries. However in times of financial crisis 2008 when the most of the stock exchanges were crashed, then oil, gold and other commodity investments gain popularity and are considered as safe investments and many investors diversify their portfolios in these alternatives. This study is aimed to investigate the relationship among different types of commodity indices such as metals, crude oil, agriculture, food and beverages and fuel and non-fuel and stock market returns in Pakistan for the period of February 1995 to December 2016 using ARDL approach. Our results suggest that metal, food and beverages and crude oil indices have positive relationship with KSE 100 index returns in long run while fuel and non-fuel commodity indices have negative relationship with stock market returns in long run. The short run results shows that metal, food and beverages, crude oil and agriculture commodity indices have positive relationship with KSE 100 index returns in short run, whereas fuel and non-fuel indices are negatively associated with Pakistani stock market returns in short run. The results of this study can be beneficial for the policy makers, Government, foreign and local investors of Pakistan because this gives a guideline to the investors for their portfolio diversification and for gaining more investment opportunities by investing in different types of commodities or KSE 100 index in Pakistan.
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