Factors Influencing the Sustainability of Microfinance Institutions in Murang’a Town, Kenya

Providing the poor with access to savings and credit services as a poverty alleviation strategy has gained prominence in the past ten years. This has resulted from the emergence of models that have shown increasing success in terms of their ability to reach the poor and in sustaining the delivery of financial services. However, a significant number of those engaged in microfinance services continue to struggle with the twin goals of outreach and sustainability.

This study therefore sought to gain better understanding of the factors affecting sustainability of microfinance institutions (MFIs) operating within Murang’a Town. The study used questionnaires to collect data from 45 respondents who consisted of 15 managers and 30 field personnel from the MFIs that operate within Murang’a Town. The study found that financial regulations, number of clients served, financial coverage and volume of credit transacted were the factors that highly affected the sustainability of MFIs.