Microfinance Institutions as Drivers of Environmental Sustainability in Artisanal Gold Mining: Evidence from Zimbabwe

This study examines the role of microfinance institutions (MFIs) in promoting environmental sustainability in Zimbabwe’s artisanal gold mining (AGM) sector, a context characterised by significant ecological degradation and weak regulatory enforcement. While previous studies have focused on MFIs’ role in financial inclusion, their potential to promote environmental sustainability in the informal AGM sector remains underexplored in sub-Saharan Africa. Using an interpretivist qualitative case study design, the study draws on in-depth interviews with MFI personnel operating in AGM regions. The findings of this study suggest that MFIs have the potential to influence environmental sustainability through mechanisms such as conditional lending, financial incentives, and environmental awareness programs within AGM sectors in which they operate. The effectiveness of MFIs in advancing environmental sustainability, however, is constrained by weak regulatory frameworks, limited resources, and the sector’s informal nature. The study contributes to the emerging literature on green microfinance by providing context-specific insights into how financial institutions function as intermediaries of environmental governance. Practically, the findings highlight the need for policy frameworks that integrate environmental considerations into microfinance operations and strengthen institutional coordination among stakeholders.