Microfinance Commercialization and Mission Drift

Item Type Journal paper
Abstract Policy makers and practitioners agree that the scaling up of microfinance requires financial sustainability in the industry and access to commercial capital markets. At the same time they worry that the commercialization of microfinance may lead to a mission drift: Microfinance institutions (MFIs) may abandon their focus on poor, rural, female borrowers and orientate themselves towards more profitable clients. In this contribution we review the empirical evidence on commercialization and mission drift in microfinance, and the evidence is that fears of a mission drift in the industry do not seem warranted. Furthermore, we report on a recent study in which we attempt to broaden the analysis of mission drift, by comparing the impact of commercial microfinance banks as opposed to ordinary retail banks on household access to and use of bank accounts. We find that commercial microfinance banks do expand the frontier of finance providing further justification to their support by bilateral and multilateral donors.
Authors Brown, Martin; Guin, Benjamin & Kirschenmann, Karolin
Journal or Publication Title Die Unternehmung : Swiss journal of business research and practice
Language English
Keywords Access to finance, microfinance, commercialization, mission drift
Subjects economics
HSG Classification contribution to scientific community
Refereed Yes
Date October 2012
Publisher Nomos
Place of Publication Baden-Baden
Volume 66
Number 4
Page Range 340-357
Number of Pages 18
ISSN 0042-059X
Depositing User Benjamin Guin
Date Deposited 04 Nov 2013 14:26
Last Modified 20 Jul 2022 17:18
URI: https://www.alexandria.unisg.ch/publications/227127


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Brown, Martin; Guin, Benjamin & Kirschenmann, Karolin (2012) Microfinance Commercialization and Mission Drift. Die Unternehmung : Swiss journal of business research and practice, 66 (4). 340-357. ISSN 0042-059X


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