Exploring Mission Drift Dimensions in Indian Micro Finance Institutions

Prajnan, Journal of Social and Management Sciences, NIBM, 2015

37 Pages Posted: 5 Jun 2017

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2015

Abstract

Mission drift in microfinance industry is becoming an ethical concern in the path of building a financially inclusive society. However, its dimensions and the reasons have not been ascertained conclusively. This paper tries to answer these issues with the help of a filtered dataset comprising of 41 MFIs in India over a period of five years i.e. 2008-09 and 2012-13. The finding of the study states that there is an unquestionable difference in the operations of the drifted and centered (not-drifted) MFIs. Our study indicates a growing number of MFIs drifted in recent years i.e. 27 in 2012-13 vs. 23 in 2008-09. Amongst them, more numbers were from non-NGO sector than NGO sector giving an indication of ownership influence. We also found that both cost inefficiency and profit motive were responsible, however, for a many of the MFIs the inference was hazy. Further, legal status and sustainability of MFIs have surfaced as the significant explaining variables of mission drift but other structural variables have also been identified.

Keywords: Mission Drift, Micro finance Institutions, Cost Inefficiency, Profit Orientation, Social performance

JEL Classification: C33, C35, G21, G28, G32

Suggested Citation

Roy, Prasenjit and Pati, Ambika Prasad, Exploring Mission Drift Dimensions in Indian Micro Finance Institutions (July 1, 2015). Prajnan, Journal of Social and Management Sciences, NIBM, 2015, Available at SSRN: https://ssrn.com/abstract=2968789 or http://dx.doi.org/10.2139/ssrn.2968789

Ambika Prasad Pati

North Eastern Hill University ( email )

Umshing-Mawkynroh
Shillong
Meghalaya, 793022
India

No contact information is available for Prasenjit Roy

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