Event Title

Determinant of profitability in the Kosovo Microfinance Institutions

Session

Management, Business and Economics

Description

In this study we assess the determinants of profitability in the microfinance institutions. The microfinance institution became very important to marginalized groups, they finance their endeavor that banks are uninterested. During this time the microfinance institutions managed to increases their capital substantially by being very profitable and as result slowly they started to move in to the turf of the banks.

The results reveal that the business loans are the most contributors to profitability in the microfinance. In terms of the cost, the labor cost affects profitability negatively mostly, showing that labor cost are important factors. Non-performing loans does not have any effect on profitability. We have used secondary data from the Kosovo Central Bank for year 2015 – 2019. The method we used are pooled, fixed effect and random effect, moreover, we did a hausman test in order to test which method is more appropriate.

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-550-47-5

Location

UBT Kampus, Lipjan

Start Date

30-10-2021 12:00 AM

End Date

30-10-2021 12:00 AM

DOI

10.33107/ubt-ic.2021.521

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Oct 30th, 12:00 AM Oct 30th, 12:00 AM

Determinant of profitability in the Kosovo Microfinance Institutions

UBT Kampus, Lipjan

In this study we assess the determinants of profitability in the microfinance institutions. The microfinance institution became very important to marginalized groups, they finance their endeavor that banks are uninterested. During this time the microfinance institutions managed to increases their capital substantially by being very profitable and as result slowly they started to move in to the turf of the banks.

The results reveal that the business loans are the most contributors to profitability in the microfinance. In terms of the cost, the labor cost affects profitability negatively mostly, showing that labor cost are important factors. Non-performing loans does not have any effect on profitability. We have used secondary data from the Kosovo Central Bank for year 2015 – 2019. The method we used are pooled, fixed effect and random effect, moreover, we did a hausman test in order to test which method is more appropriate.