This study unveils which factors affect decisions to fund Microfinance Institutions (MFIs). A quality-loyalty model is proposed to explain funder—MFI relationships. The role played by outreach and sustainability as perceived quality antecedents within a MFI has been studied. The model includes MFI transparency as an antecedent of trust. The proposed model is tested using a survey of 116 managers of MFI funding bodies. The analytical technique used to test the model is Partial Least Squares (PLS). The results suggest that both outreach and sustainability are important for MFI funders. The managerial implications for MFIs are discussed.
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