Title page for ETD etd-07142012-184913

Document Type Master's Dissertation
Author Kasenge, Eric
URN etd-07142012-184913
Document Title Achieving sustainability while delivering on the social impact : challenges facing microfinance institutions
Degree MBA
Department Gordon Institute of Business Science
Advisor Name Title
Ms Z Ismail Supervisor
  • social impact
  • sustainability
  • microfinance institution
  • microfinance
Date 2012-03-08
Availability unrestricted
The aim of this study was to investigate how Microfinance Institutions (MFIs) in South Africa balance sustainability with developmental objectives. Twelve semistructured, in-depth interviews were conducted with microfinance subject matter and microfinance institutions.

The research found that commercialisation is not compatible with social impact as it leads to mission drift, which can be managed by an inclusive stakeholder governance structure. The trade-off between sustainability and social impact (outreach) was evident for commercial MFIs; while sustainability can be achieved through scale and cost management. In addition, MFIs achieve lower delinquency rate by implementing non-financial interventions such as client training and using group lending methodology that fosters social capital in the client base.

The lack of a visible collaboration between MFIs has deprived the industry of a strong voice that can mobilise society to leverage the benefits of microfinance to help South Africa reduce inequalities. Despite the fact that regulatory restrictions concerning savings mobilisation for micro enterprise lenders are inhibiting product innovation and curtailing outreach, microfinance has proved to be a valuable tool that South Africa has not leveraged to alleviate poverty and reduce income inequalities.

2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.

Please cite as follows:

Kasenge, E 2011, Achieving sustainability while delivering on the social impact : challenges facing microfinance institutions, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-07142012-184913/ >


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