Understanding The Factors Affecting The Sustainability Model Prevalent In The Microfinance Sector Using Pls-Sem

Abstract

Purpose: The aim of this study is to examine as well as analyze the most influential determinants of sustainability using the Microfinance Information Exchange (MIX) secondary database for the year 2022 on 528 Microfinance Institutions (MFIs) operating worldwide.

Design/methodology/approach: The methodology used in the present paper involves the application of Partial Least Squares Structural Equation Modelling (PLS-SEM) on Smart PLS4 software for the secondary database comprising microfinance institutions operating worldwide.

Findings: The results have indicated the most important indicators affecting the sustainability over the profitability variables of the microfinance institutions operating worldwide in alignment with one of the leading Microfinance companies in India; Satin Creditcare Network Ltd.

Research, Practical & Social implications: The study will be quite advantageous and gainful for the currently operating microfinance institutions to enhance their productivity and alleviate poverty as well as provide means of livelihood for the vulnerable section of the society.

Originality/value: The value of the study is in developing a sustainability model for the microfinance industry employing the latest technique of Partial least squares structural equation modelling using Smart PLS 4 software.