Ownership Structure and Social Sustainability in Zambia’s Microfinance Sector: A Stakeholder-Agency Perspective

Abstract This study examines the relationship between ownership structure and social sustainability of Microfinance Institutions (MFIs) in Zambia, integrating stakeholder and agency theories within a mixed-method framework. The research was motivated by concerns that ownership concentration among profit-oriented shareholders undermines the developmental mission of microfinance, leading to “mission drift” away from low-income clients. Quantitative data were collected from 114 regulated MFIs and analyzed using non-parametric Kruskal–Wallis tests to determine whether differences in ownership structure (private, cooperative, or NGO-based) significantly influence social performance and outreach. Complementary qualitative data were obtained through 30 in-depth interviews with board members, managers, regulators, and clients. Quantitative results reveal significant differences in social performance (p < 0.05) and outreach (p < 0.05) across ownership types, confirming that ownership form affects social mission orientation. Qualitative findings demonstrate that cooperative and NGO-owned MFIs prioritize inclusion and community impact, whereas privately owned MFIs focus on profitability and portfolio growth. The study concludes that ownership concentration is negatively associated with social sustainability, while community-based or cooperative models enhance outreach and inclusivity. The findings support stakeholder theory’s proposition that participatory ownership fosters legitimacy and social alignment. Policy recommendations emphasize hybrid ownership structures, stakeholder engagement mechanisms, and regulatory incentives to balance profitability with developmental impact.