Exploring Mission Drift Dimensions in Indian Micro Finance Institutions

Prajnan, Vol. XLIV, No. 2, 2015-16, pp.139-163

Posted: 3 Jan 2016

See all articles by A. P. Pati

A. P. Pati

North Eastern Hill University

Multiple version iconThere are 2 versions of this paper

Date Written: July 31, 2015

Abstract

Mission drift in the micro finance industry is becoming an ethical concern on 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 41 Micro Finance Institutions (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 that 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 the non-NGO sector than the NGO sector, giving an indication of ownership influence. We also found that both cost inefficiency and profit motive were responsible; however, for many of the MFIs the inference was unclear. Further, legal status and sustainability of MFIs have surfaced as being significant factors, explaining variables of mission drift, but other structural variables have also been identified.

Keywords: Mission Drift, Social Performance, Financial Sustainability, Cost Inefficiency, Profit Orientation

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

Suggested Citation

Pati, Ambika Prasad, Exploring Mission Drift Dimensions in Indian Micro Finance Institutions (July 31, 2015). Prajnan, Vol. XLIV, No. 2, 2015-16, pp.139-163 , Available at SSRN: https://ssrn.com/abstract=2710075

Ambika Prasad Pati (Contact Author)

North Eastern Hill University ( email )

Umshing-Mawkynroh
Shillong
Meghalaya, 793022
India

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