This article examines the factors influencing the financial sustainability of European microfinance institutions (MFIs), which aim to achieve long-term viability while supporting economic and social development. The authors compare the differing approaches of Western and Eastern European MFIs, noting that the latter tend to prioritise profitability and growth, while the former focus more on social inclusion. Using data from the MIX Market database (2007–2008), the study employs statistical analysis to identify the key determinants of sustainability. A benchmark analysis of Latin American MFIs reveals that solvency and default risk are significant predictors of financial sustainability. However, the European analysis reveals that, in addition to solvency, operational inefficiency and cash flow generation also significantly affect sustainability. The findings suggest that improving efficiency, maintaining financial strength and generating stable cash flows are critical for the long-term success of European MFIs.