Mission impossible: diffusion and drift in the microfinance industry
Sustainability Accounting, Management and Policy Journal
ISSN: 2040-8021
Article publication date: 28 October 2010
Abstract
Purpose
The purpose of this paper is to thoroughly examine sources of mission diffusion and mission drift in the microfinance industry and to identify consequences of and remedies to these problems.
Design/methodology/approach
Extensive field experience relating to individual microfinance institutions (MFIs) and industry trends provides the grounding for a review of the trade and academic literatures in microfinance and social enterprise management.
Findings
Mission diffusion arises from pursuing diverse approaches to poverty alleviation and addressing disparate and changing stakeholder interests. Mission drift arises from commercialization and conversion activities aimed toward enhancing ratings and achieving scale. Mission clarity can be regained through clarification of the mission along with more effective corporate governance and performance management systems.
Practical implications
The tension between financial and social performance is not merely ideological – economic realities make it almost impossible to stay on mission. Understanding these realities can help MFIs maintain and regain clarity of mission.
Originality/value
The paper sheds new light on reasons the microfinance industry has not been able to deliver on promises of poverty alleviation during a period of heavy demand rapid scaling.
Keywords
Citation
Epstein, M.J. and Yuthas, K. (2010), "Mission impossible: diffusion and drift in the microfinance industry", Sustainability Accounting, Management and Policy Journal, Vol. 1 No. 2, pp. 201-221. https://doi.org/10.1108/20408021011089248
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited