For more than five decades, developing countries (including Cameroon) have been primary beneficiaries of donor-funded projects targeting many sectors, including agriculture and rural development. Cameroon’s rural landscape witnessed a series of project interventions which emphasized sustainability. Although research efforts have been directed towards understanding the planning, implementation and impacts of donor-funded projects, not enough scientific information exists on the determinants, challenges and prospects of sustaining donor-funded projects in rural communities in Cameroon. For this study, the Investment Fund for Communal and Agricultural Micro-projects (FIMAC I) scheme, was used to diagnose the determinants, challenges and prospects for sustaining development projects in the North West Region (NWR) of Cameroon. A representative sample of 150 beneficiaries drawn from 20 farming groups in the NWR was conducted, to generate data which was complemented by interviews. The binary logistic regression results reveal the following: Although there is a significant change in the level of incomes for the FIMAC I project beneficiaries, its sustainability (mirrored through continuity) is dependent upon a myriad of socio-economic factors including family size, length of stay in the community, gender, education and the status of the beneficiary. Furthermore, the less transparent loan application process and the lack of collateral security were the main challenges faced by project beneficiaries. We argue that the introduction of soft loans with minimal demands for collateral security could increase beneficiary participation in projects, while beneficiary groups should further diversify their sources of capital and productive activities. The study does not only contribute to existing theoretical constructs on sustainable rural development, but also makes a succinct request for future studies to unbundle the conditions, under which donor-funded projects are rendered sustainable in rural contexts.