Sustainability Index plays a vital role in measuring the sustainability level by using multidimensional constructs. Sustainability of Microfinance institution (MFI) may simply be defined as the capacity of the MFI to continue as a going concern by providing services to targeted people, ignored by the conventional financial institutions. The purpose of this study is to conceptualize an index that can measure the sustainability of Microfinance institution. Hence, this paper is primarily reviewing the existing literature on measuring sustainability of MFI while discussing the shortcomings of the current measurement of
sustainability. Furthermore, this study is the first of its kind to propose a comprehensive index comprising of financial (financial self‐sufficiency and operational self‐sufficiency) and outreach (depth of outreach and breadth of outreach) aspects to determine the overall sustainability of MFI.
