2010-08-28 papers

on Microfinance

Issue of 2010‒08‒28
two papers chosen by
Aastha Pudasainee and Olivier Dagnelie

Commercial Microfinance and Social Responsibility: A Critique By Nair, Tara
Mission Drift of large MFIs? By Schmidt, Oliver; Ramana, N. V.

Commercial Microfinance and Social Responsibility: A Critique

By:	Nair, Tara
Abstract:	Working within the logic of maximising investor returns, the strategic focus of Indian microfinance institutions seems to have shifted from serving the poor borrowers to chasing profits. The commercial transformation of MFIs has been accompanied by changes in the structure of ownership, management and nature of their stakeholder commitment. This essay discusses some of the critical inadequacies in the approaches advocated and currently practised by the commercial MFIs in order to restore the sector’s focus on poor borrowers.
Keywords:	commercial microfinance; social responsibility; India
JEL:	M14 A13 G21
Date:	2010–07–31
URL:	http://d.repec.org/n?u=RePEc:pra:mprapa:24412&r=mfd

Mission Drift of large MFIs?

By:	Schmidt, Oliver; Ramana, N. V.
Abstract:	Since the Mexican Microfinance Institution (MFI) Compartamos went public in 2007 – whereby promoting NGOs and private investors earned about USD 425 million – leading journals and magazines have repeatedly run rather sceptical articles about microfinance. They are mostly inspired by antagonists of MFIs growing into market driven enterprises. This antagonism has been blended with contemplation about assumed “subprime issues” of microfinance. However, the sector showed a steady performance, different from most other segments of the financial sector. The unholy blend of these two lines of thought risks to create an unwarranted image of microfinance.
Keywords:	Microfinance; Mission Drift; Subprime; Sustainability
JEL:	N20 O16
Date:	2010–01–07
URL:	http://d.repec.org/n?u=RePEc:pra:mprapa:24410&r=mfd

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