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Tier 1 MFIs Financial Performance: Cash-flow statement analysis


  • Gautier Dumont
  • Mathias Schmit


When assessing the financial performance of Microfinance institutions, the current literature commonly uses balance sheets and income statements. In order to assess sources of cash generated, if any, we analyse the cash flow statements of the 30 largest MFIs that display audited reports between 2006 and 2010. We find that all the MFIs of the sample had cumulated negative free cash flow over the period and positive cash flow from operations. We propose classification of MFIs based on their investment and financing policies to assess the risk for their depositors. The results based on cash-flow analysis to assess financial performance can substantially differ from what can be read in the literature.

Suggested Citation

  • Gautier Dumont & Mathias Schmit, 2013. "Tier 1 MFIs Financial Performance: Cash-flow statement analysis," Working Papers CEB 13-054, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/153215

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    References listed on IDEAS

    1. Steven B. Caudill & Daniel M. Gropper & Valentina Hartarska, 2009. "Which Microfinance Institutions Are Becoming More Cost Effective with Time? Evidence from a Mixture Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(4), pages 651-672, June.
    2. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
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    More about this item


    microfinance; financial performance; cash-flow statement; depositor; corporate finance; payout policy;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance


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