Modelling sustainability challenges and opportunities for microfinance institutions in the Arab region

Nahil Saqfalhait, Mohammad W. Alomari, Abdullah AlGhazali and Omar M. Alzoubi

International Journal of Sustainable Economy, 2026, vol. 18, issue 3, 272-298

Abstract: This study aims to develop a two-step approach for assessing the sustainability of 27 microfinance institutions (MFIs) in nine Arab countries during the years from 2010 to 2018. The first step applies the technique for order preference by similarity to ideal solution (TOPSIS) approach to develop MFIs' sustainability scores, considering the financial and social performance dimensions. The second step investigates how firms-level factors and macroeconomic performance may influence the sustainability of these institutions, utilising the dynamic panel data regression models GMM and FM-OLS. Our findings reveal that over the period the overall sustainability of MFIs increased steadily from 55% to 81%, while the average threshold of the microfinance industry was 66%. Our empirical analyses demonstrate that profitability and outreach have positively influenced MFIs' sustainability. In contrast, higher financial leverage and administrative costs and GDP growth may hurt their sustainability in the long run.

Keywords: microfinance institutions; MFIs; sustainability challenges; sustainability opportunities; TOPSIS; panel GMM analysis. (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.inderscience.com/link.php?id=154782 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsuse:v:18:y:2026:i:3:p:272-298

Access Statistics for this article

More articles in International Journal of Sustainable Economy from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().