The Question of Sustainability among Zimbabwean Microfinance Institutions: A Case of MFIs in Gokwe Town

Mr. Maburutse Brian Tafadzwa, Mr Chidhumo Givemore, Mrs Marada Tsitsi and Miss Chaurura Berthina.
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Mr. Maburutse Brian Tafadzwa: Part time lecture: Finance and Investment; Catholic University of Zimbabwe Gokwe Campus, Midlands; Zimbabwe
Mr Chidhumo Givemore: Part time lecture: Economics: Catholic University of Zimbabwe Gokwe Campus, Midlands; Zimbabwe
Mrs Marada Tsitsi: Branch Manager Yambukai Finance Midlands Zimbabwe
Miss Chaurura Berthina.: Relationship Manager Red Sphere Finance. Harare; Zimbabwe

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 4, 3403-3416

Abstract: The aim of this paper is to examine the sustainability of microfinance institutions (MFIs) in Gokwe town, Zimbabwe, with focus on their operational viability, challenges hindering their growth and survival as well as strategies that enhance their sustainability. As the demand for financial services in rural areas increases, MFIs play a crucial role in enhancing economic resilience among low-income populations. However, challenges such as limited capital, regulatory constraints, and market competition threaten their sustainability. Through qualitative and quantitative analysis, this study ascertains the challenges faced and evaluates the strategies employed by MFIs to maintain financial health and social impact. Key findings indicate that while some MFIs have successfully implemented innovative lending models and client education programs, others struggle with high default rates, intense competition, client over-indebtedness, economic instability and inadequate funding. The paper highlights the importance of adaptive management practices and collaborative approaches among stakeholders to bolster the sustainability of MFIs. Ultimately, this research contributes to the broader discourse on microfinance sustainability in Zimbabwe, providing insights that can inform policymakers and practitioners aiming to enhance the effectiveness of MFIs in promoting financial inclusion and economic development in rural settings.

Date: 2025
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