nep-mfd New Economics Papers
on Microfinance
Issue of 2010‒08‒28
two papers chosen by
Olivier Dagnelie
Instituto de Analisis Economico, CSIC

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

  1. 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
  2. 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

This nep-mfd issue is ©2010 by Olivier Dagnelie. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.