Assessment of Financial and Operating Performance

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The establishment of sustainable Microfinance Institutions (MFI) that reach a large number of rural and urban poor who are not served by the conventional financial institutions, such as the commercial banks, has been a prime component of the new development strategy of Ethiopia. Healthy financial and operating performance of microfinance institutions is very important for their well functioning and to serve their clients properly. The motivating philosophy of this paper is that unless MFIs become viable and sustainable financial institutions, they can never fully realize their objective of reaching a greater number of poor people. In light of this, this paper has attempted to look at the Financial and Operating Performance of DECSI at firm level and compare against the Industry Average (I.A).The major finding of the study indicates that, the percent of women borrowers of DECSI is lower than the percent of women borrowers of the Industry Average. So DECSI should have to revise its client targeting criteria.From Financial Sustainability and Profitability angle, it is found that DECSI is going down the ladder of Sustainability and Profitability measures during the periods of the study