Abstract:
The objective of this study was to assess factors influencing revenue performance of MFIs in
Tanzania: A case of Tunakopesha Limited. The study utilized a secondary data set that was
gathered from Tunakopesha Limited for a period of twenty years, from 2002 to 2022. The
independent variables in the study were firm size, loans disbursement and liquidity, while the
dependent variable was the revenue performance of Microfinance Return on Assets. National
micro-finance policy, Grameen solidarity group theory and theory of the firm were utilized in this
study. For this study, a correlation research design was utilized. The correlation and regression
analysis were used to analyze the relationship between dependent and independent variables.
Findings portrayed that there is significant relationship between firm size and ROA (0.0757). Also,
results indicated that there is significant relationship between loans disbursement and ROA (r
=0.0757). Similarly, findings showed that there is insignificant relationship between liquidity and
ROA (r = -0.6245). The results value of R2 was 68.01% which is significant level to explain about
our model. Based on the findings of the study, it can be concluded that firm size has a strong
negative correlation with ROA, indicating that as the size of the institution increases, its ROA
decreases. However, loans disbursement has a positive correlation with ROA, meaning that the
more loans the institution disburses, the higher its ROA. Moreover, the study found that liquidity
has a moderate negative relationship with ROA, suggesting that a higher level of liquidity may
not necessarily lead to higher ROA. The study recommends investigation on the impact of
technology adoption, such as mobile banking and digital finance, on the revenue performance of
MFIs in Tanzania. Also, a comparative study between different types of MFIs in Tanzania, such as
community-based versus commercial-based institutions, to gain insights into their unique
challenges and opportunities.
Keywords: Firm Size, Loans Disbursement, Liquidity, Microfinance Institutions, Return on Assets
