This paper examines the role of property valuation in enhancing the financial stability of microfinance institutions (MFIs). Drawing on an integrative review of secondary literature, the study highlights how accurate collateral valuation reduces default risks, secures loan portfolios, and supports institutional sustainability. The analysis reveals that preventive and transparent valuation practices not only safeguard financial assets but also foster trust among borrowers, investors, and regulators. Governance and organizational culture emerge as decisive factors shaping valuation effectiveness, with leadership commitment and accountability identified as central drivers of institutional credibility. Knowledge gaps and resource constraints, particularly in developing economies, are noted as persistent barriers to effective valuation practices. The study concludes that embedding transparency, governance, and professional capacity into valuation processes is crucial for MFIs to achieve financial stability, foster societal trust, and make meaningful contributions to sustainable development.