Factors Influencing the Sustainability of Micro-Finance Institutions in Murang’a Municipality

Abstract

Providing the poor with access to savings and credit services as poverty alleviation strategy has gained prominence in the past ten years, this has resulted from the emergence of models showing increasing success in terms ability to reach the poor and in sustaining the delivery services. However, significant number of those engaged in microfinance services continues to struggle with sustainability (Tang 2002). This study therefore sought to establish the factors affecting sustainability of microfinance institutions operating within the Murang’a Municipality. . 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 microfinance institutions. The study concludes that sustainability of MFIs is a function of related and interconnected m factors. The study recommends MFIs to open many branches to reach as many people as possible and ensure they conform to rules and regulations.