This study examines the determinants of financial performance of microfinance institutions (MFIs) against the backdrop of the public and academic debate over the financial and social implications of microfinance. In the absence of a conceptual model, this study chooses an inductive research approach with the objective of defining and developing a conceptual model with the capacity to explain, quantify and compare the performance of MFIs. The research is particularly relevant in the African context where microloan interest rates regularly exceed 100 percent per annum and where the microfinance industry is lacking behind its global peers in regard to financial and social performance.
Johannes Flosbach works for a large Nigerian company. During his research time he was a management consultant with Roland Berger and Bain & Co.