Variables

Description

Expected sign

Capital Adequacy Ratio (CAR)

Capital/total Assets

Positive

Risk Coverage Ratio (RISK)

Capital/total risk incurred

Positive

Liquidity Ratio (LIQUIDITY)

Current financial assets/current liabilities

Negative

External Funding Coefficient (EFC)

Equity/Debts

Positive

Fixed Assets Coverage Ratio (FACR)

Permanent resources/total fixed assets

Positive

Size of the MFI (SIZE)

Natural logarithm of total assets

Ambiguous

Subvention (SUB)

Quantitative variable

Ambiguous