Sustainability of Microfinance Banks in the Digital Age in Selected Sub-Saharan African Countries

Abstract The digital transformation of microfinance banks (MFBs) in sub-Saharan Africa (SSA) is increasingly critical due to rising competition and the need for adaptation. This study examines the sustainability of MFBs in selected SSA countries within the context of digitalisation. Using data from 2017–2022 from the Microfinance Information Exchange, the International Monetary Fund, and the World Bank, the study analyses 115 MFBs across 21 SSA countries using a fixed-effects regression model. Findings show that digital technologies significantly enhance MFB performance and sustainability, with digitalisation investments, mobile banking, and internet banking positively influencing financial self-sufficiency and return on assets. Bank size and age are also identified as key drivers of sustainable performance. In contrast, inflation, leverage, and average loan size negatively affect sustainability, while GDP growth exerts a modest positive effect. The study recommends that policymakers promote digitalisation to improve efficiency, productivity, customer outreach, and loan management in microfinance banks.