Abstract:
The aim of this study was to investigate the impact of transformation of micro finance institutions
into commercial banks taking large MFIs in Ethiopia. The study was conducted using an
explanatory research design to attain this study. The study employed a combination of
qualitative and quantitative research methodologies to gather and evaluate both primary and
secondary data sources. For the study, purpose five MFIs has been chosen from among the 30
registered MFIs that were currently members of AEMFI. The primary data are obtain using pre-
designed questionnaires from MFIs management, supervision and bank licensing teams, while
the secondary data is obtain through documentary reviews. A total of 165 respondents were
drawn from MFIs workers, super vision and bank licensing team. The sample approaches were
purposive sampling, which is a non-probability sampling strategy. The data from the
questionnaire was encoded; stored and analyzed using descriptive statistics and multiple linear
regressions model whereas the data from the interview was interpreted using notes. The findings
indicated that organizational culture , IT infrastructure, human resource (HR) and ownership
governance had a positive and statistically significant impact on the transformation of MFIs to
commercial banks. Furthermore, the same output obtained from the questioner
about the
association between the variables in the study and transformation. The recommendation for this
study was that MFIs before considering a transformation should have to plan adequately and
commit the required resources.
