American Journal of Theoretical and Applied Business 2020; 6(1): 1-5 http://www.sciencepublishinggroup.com/j/ajtab doi: 10.11648/j.ajtab.20200601.11 ISSN: 2469-7834 (Print); ISSN: 2469-7842 (Online) Assessing the Institutional Outreach and Sustainability of Micro Finance Institutions in Ethiopia: Evidence from Omo Microfinance Institution Hawassa Branch Mathewos Yure Dangisso, Kanbiro Orkaido Deyganto Furra Institute of Development Studies and Education, Furra College Hawassa Gudamale Campus, Yirgalem, Ethiopia Email address: To cite this article: Mathewos Yure Dangisso, Kanbiro Orkaido Deyganto. Assessing the Institutional Outreach and Sustainability of Micro Finance Institutions in Ethiopia: Evidence from Omo Microfinance Institution Hawassa Branch. American Journal of Theoretical and Applied Business. Vol. 6, No. 1, 2020, pp. 1-5. doi: 10.11648/j.ajtab.20200601.11 Received: March 2, 2020; Accepted: March 19, 2020; Published: April 30, 2020 Abstract: Institutional sustainability and outreach are key issues in micro finance institutions. So, the objective of this study was to assess the institutional outreach and sustainability of Omo Microfinance Institution Hawassa branch. To this end, the researchers used descriptive research design because using this type of research design enables the researchers to assess and describe the present situation of institutional sustainability and outreach of the institution. The primary data was collected from sixty respondents using structured questionnaire. Then, descriptive statistics analysis has been done through SPSS version 20.0 in order to get the reliable findings. Consequently, the result of this study showed that the level of sustainability and institutional outreach is improved by deposit and saving mobilization. Besides, this study revealed that the outreach and sustainability of OMFI Hawassa branch were influenced by constraints such poor loan management, flexibility of loan repayment schedule, and loan defaulting faced by customers. Based on the findings of the study, the researchers forwarded possible recommendations for the OMFI Hawassa branch in order to improve the institutional sustainability and outreach. Keywords: Omo Microfinance Institution, Sustainability, Outreach, Hawassa, Ethiopia 1. Introduction 1.1. Background of the Study Microfinance refers to the delivery of financial services such as credit, savings and insurance for lower income society in the nation. Accordingly, Ethiopian Proclamation No. 626/2009 defines micro financing business as "the provision of financial services like accepting savings extend credit, drawing and accepting drafts payable, providing money transfer services and others specified in the Article 3 (2) of the proclamation. Besides, [1] defined microfinance as a provision of financial services to low income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. The two aspects on which OMFIs concentrates are outreach to all society and its sustainability in performing financial services. Outreach- is progress toward the mission of development finance. This mission is to make the lives of poor people better. MFIs do this by producing outreach, loans and deposits used by the poor. It refer to the effort by micro finance organizations to extend loans and financial services to an ever-wider audience (breadth of outreach) and especially toward the poorest of the poor (depth of outreach). Thus, reaching the poorest is depth of outreach, but reaching large number of people even if they are relatively less poor is breadth of outreach. Sustainability- is the ability to repeat outreach in the future MFIs differ from banks because they provide financial services to low income customers and often provide loans based on group based collateral. It can be defined as the capacity of a program to stay financially viable even if subsidies and financial aids are cut off by reducing expenses per loan and increasing the probability of repayment. Hence, studying outreach and sustainability of OMFIs is an important agenda of 21th century. 1.2. Statement of the Problem The prevailing operation of the OMFIs in low income