Cyril Fouillet

Profit Empowerment: The Microfinance Institution’s Mission Drift

This chapter concerns about the implications of imposed institutional discipline. When donors adopted a new approach regarding the sustainability of Microfinance Institutions (MFIs), they transformed the intervention structure and created drastic shift in the microfinance sector. The chapter proposes to launch the debate by concentrating on the Indian microfinance sector with a special focus on the State of Andhra Pradesh. It lay outs to what extent one can talk about the microfinance sector being dependent on donors. The chapter revisits the microfinance crisis that erupted in India in March 2006 by explaining the facts and interpretations given by the various actors in the sector. It raises some caution regarding the overwhelming push for MFIs to become financially self-sustainable, a push often than not exerted by donor organizations. Such a push has severe consequences, ranging from a substantial one such as a mission drift to the questionable practices employed by institutions. Keywords:Andhra Pradesh; microfinance institutions (MFIs); mission drift

Microfinance studies : introduction and overview

Microfinance (MF) has grown over the last two decades into an important sub-field of development studies. This special issue of Oxford Development Studies explores the contributions of MF, drawing particularly on research conducted in India. After a brief overview of the emergence of MF as a research field, this introduction develops three themes. First, we argue that MF interventions generally involve, and assume a process of transformation of, financially excluded people and groups who are not fully dominated by the logic of market exchange but have histories, culture, social relationships and politics structured by other kinds of authority and dynamics. Second, we argue that understanding MF interventions at the local level requires the social and political analysis of global development architecture, while MF may also play a role in consolidating or cementing global political economy at its base. Third, we argue that MF interventions have provided fertile ground for research into the causes and consequences of poverty. The introduction ends with summaries of the contents of the special issue.