Exploring Mission Drift Dimensions in Indian Micro Finance Institutions
Prajnan, Vol. XLIV, No. 2, 2015-16, pp.139-163
Posted: 3 Jan 2016
There are 2 versions of this paper
Exploring Mission Drift Dimensions in Indian Micro Finance Institutions
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
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