Abstract:
ABSTRACT
Micro finance institutions refer to small, saving and insurance services extended and economically
disadvantaged segment of society. In the past ten years micro finance is emerging as powerful tool
of growth in Kenya economy. This has resulted from increasing success in terms to reach the poor
and sustaining delivery services. However large number of those engaged in microfinance services
continue to struggle with sustainability. The research sought to establish the factors affecting the
sustainability of microfinance institutions in Kenya and how they can be solved to promote
success, stability and better performance of micro finance institutions. The study was therefore
discover how the factors such as credit risks, geographical coverage, financial regulations, number
of clients and management affect the sustainability of MFIs.
Descriptive research design was used to outline the features of the population in interest to come
up with predictions. The questionnaires were physically delivered to the micro finance operators
to fill and were collected later. The study found that financial regulations, geographical coverage
and volume of credit transacted were the factors that highly affected the sustainability of
microfinance institutions. These factors contribute positively or negatively to the sustainability of
the microfinance institutions. The study concludes that sustainability of MFIs is a function of
related and interconnected factors. The study recommends MFIs to open many branches to reach
as many people as possible and ensure they conform to rules and regulation
