Microfinance Programme Sustainability Analysis Using a Complex System Approach

Abstract

This study aims to analyse the sustainability of a microfinance programme project in Indonesia via a complex systems approach by using a case study and applied thematic analysis. Data are collected by document review, observation, interviews and focus group discussions. The results reveal some issues that arise as a result of closure of the programme and the actions taken to cope with those issues that led to sustainability of the microfinance institution. The issues are related to project governance, accountability, capital and profitability, competition and empowerment. The analysis shows that the move towards a sustainable project presents characteristics of a complex system, including interconnectedness, adaptation, feedback, self-organisation, and emergence (IAFSE). These findings have implications for microfinance sustainability management and microfinance programme design. Furthermore, a model of sustainable microfinance projects and a framework to sustain microfinance programme (institutions) using a complex system approach are proposed.