Jehona Shkodra

Department of Agro-economy,

Faculty of Agriculture and Veterinary University of Pristina,

Kosovo

jehona.shkodra@uni-pr.edu

Financial performance of microfinance institutions in Kosovo

Abstract. This article seeks to investigate the determinants of financial performance of microfinance institutions in Kosovo over the period of 2007–2016. The data has been taken from twelve microfinance institutions in Kosovo. The dependent variables used as proxies for microfinance institutions’ (MFI) performance are Operational self-sufficiency (OSS), Return on Assets (ROA) and Profit Margin (PM). ROA and PM are widely used indicators to analyse financial performance or profitability of MFI. The findings of this study show that the most important factor which has strong impact on financial performance of MFIs in Kosovo is high interest rate on loans. Our results show that the age of MFI is the determinant that influences its financial performance. It can also be noted that MFI with better governance are those that are members of financial associations.

Received: January, 2019

1st Revision: June, 2019

Accepted: August, 2019

DOI: 10.14254/2071-8330.2019/12-3/3

JEL Classification: E4, E51, F65, G21

Keywords: microfinance institutions, financial performance, Kosovo, profit margin, return on assets and self-sufficiency