Key Success Drivers for Microfinance Institutions in Zimbabwe

Abstract

The microfinance sector has become a major conduit for the provision of financial services to the poor citizens and the informal business sector who are shunned by the conventional banking system on the basis of being high risk. Quite a significant number of microfinance institutions have been struggling for survival since the adoption of the multicurrency owing to the general meltdown of the economy. This study focuses on key drivers of success underpinning the performance of Microfinance Institutions (MFIs) in Zimbabwe. It adopts both inferential and descriptive methods to identify the antecedents of success in the microfinance business. The study identifies prudent risk management, regulatory framework, corporate governance, technology and innovations, and staff training and motivation as significant drivers of success for microfinance institutions in Zimbabwe. Other factors affecting the success of MFIs include management and leadership, access to resources as well as coverage, reach and marketing.