Business Strategy and Sustainability of Microfinance Institutions in Ghana

Abstract

The relationship between business strategies and sustainability of microfinance institutions was investigated. The research was based on both qualitative and quantitative approaches. First a qualitative interview was conducted by interviewing 14 executives of sampled microfinance institutions with a focus on the business strategies they employ to keep them viable vis a vis the factors; effective screening mechanisms, enforcing group collateral, regular clients’ meetings, minimization of default rates, intensification of peer monitoring and financial product innovation. This was followed by a self-administered survey involving 130 MFIs. The study revealed all the six factors were significant to the sustainability of MFIs in Ghana.