An Assessment of the Impact of Non-Performing Loans on the Profitability of Microfinance Institutions in Zimbabwe

The prevalence of non-performing loans in the microfinance sector is a major concern in reducing the profitability of MFIs in Zimbabwe, therefore, this study investigated the impact of non-performing loans on the profitability of MFIs in Zimbabwe. The study adopted a descriptive research design and the study population constituted MFIs in Zimbabwe in which the sample size was 170 MFIs using random sampling as a sampling technique. Closed-ended questionnaires were used as data collection instruments. The study's major findings revealed that NPLs have a statistically significant negative impact on the profitability of MFIs in Zimbabwe. Furthermore, the study recommended that managers of MFIs should use credit reference bureaus to get information on the credit history and risk profile of all prospective borrowers. It also recommended that MFIs should alter their policies in line with the changes in the economic environment