Myths in Microfinance
PROGRESS IN INTERNATIONAL BUSINESS RESEARCH, M. Feldman & G. Santangelo, Emerald, 2008
Posted: 19 Dec 2010 Last revised: 11 Jan 2011
Date Written: 2008
Microfinance – the provision of financial services to the poor – is high on the public agenda. We discuss and evaluate three myths regarding microfinance based on new data from rated microfinance institutions (MFIs). The first myth is that an efficient MFI needs to be shareholder owned; second that its governance should first and foremost address the potential conflict between owners and managers; and third that MFIs are drifting away from their poorer customers towards serving the wealthier. The data do not support any of these myths. We conclude that microfinance is a viable business model.
Keywords: Microfinance, ownership, mission drift, governance, global study
JEL Classification: G21, O16
Suggested Citation: Suggested Citation