The Critical Success Factors and their Impact on Sustainability: Evidence from Microfinance Institutions in Ghana

Abstract

This paper aimed at investigating the relationship between critical success factors and sustainability of microfinance institutions in Ghana. The objective of this paper was to assess the level of critical success factors on microfinance operations and consequently investigate how this critical success factors influence the level of sustainability. In this proposed work, the study focused on Core competencies, marketing strategies, company resources, non-financial resources, competive advantages, customer loyalty and brand as a measure of critical success factors. The intention of this study is to provide the understanding on how people should strengthen their business by looking at all the success factors and their impact on organizational sustainability hence helps to reduce the risk of failure and increase chances of success. The study sought to contribute to quantitative estimation of the relationship between these variables given the sound theoretical foundation with no empirical evidence to support or contradict the theory in the Ghanaian context. Employing a cross-sectional survey design, data on the variables are collected via self-administered questionnaires. Thirty (30) microfinance institutions across Ghana and sample size of 300 staff of these institutions were used via multi-stage sampling technique. The study used mean scale and standard multiple regression analysis to address the research process and achieve the objective . However, drawing from the theories arguments and other empirical evidences, it was revealed that six out of seven critical success factors had contributed significant positive influence on the level of sustainability with the exception of non- financial resource considered as negative related impact. It is recommended that microfinance institutions should critically review their critical success indicators, seek for additional external financial support and minimize overreliance on non-financial resources. Management should practically develop and implement constant strategies to strengthen the critical success factors.