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Understanding the ecosystem of microfinance institutions in India

Debapratim Purkayastha (Department of Marketing and Strategy, ICFAI Business School, Hyderabad, India)
Trilochan Tripathy (Department of Finance, XLRI-Xavier School of Management, Jamshedpur, India)
Biswajit Das (Department of Marketing, KIIT University, Bhubaneswar, India)

Social Enterprise Journal

ISSN: 1750-8614

Article publication date: 27 February 2020

Issue publication date: 19 August 2020




This paper aims to build upon the various studies conducted on the ecosystem and expands the understanding of the ecosystem of microfinance institutions (MFIs) in India. The discussions in this essay entail a literature review that analyzes the discourse on the ecosystem of MFIs, and based on this an attempt has been made to conceptually design a model for the ecosystem of MFIs in India.


The authors design the “Indian microfinance ecosystem model” based on the actors in the broader financial ecosystem (Bloom and Dees, 2008; Ledgerwood and Gibson, 2013) and the capital infrastructure and the context-setting factors of the social entrepreneurship ecosystem (Dees et al., 2008) that best describes the Indian MFI scenarios.


The ecosystem of MFIs in India is found to be very complicated. The interactions among numerous actors – who are core product or service providers, facilitators, client, beneficiaries, resource providers, competitors, complementary organizations, regulators, opponents and influential bystanders. The authors also observed that the capital infrastructure and context-setting factors such as policy, politics, media, economic and social conditions are equally crucial for the MFIs to survive and flourish. Moreover, the ecosystem is also dynamic and could change with the environmental conditions and entry of new entrants into the ecosystem.

Research limitations/implications

Understanding the ecosystem of MFIs from the strategic perspective would also be of interest to stakeholders such as donors, investors, banks, government and so on. For MFIs, knowing their place in the ecosystem is an essential step in determining their strategy.

Practical implications

Understanding the elements of the ecosystem would help MFIs to assess whether they have achieved the minimum critical environmental conditions in the ecosystem for their business model to succeed.

Social implications

Better understanding of the ecosystem will help create social benefits through better service delivery to the low-income population.


Expands the existing business ecosystem literature by extending it to the social policy, social entrepreneurship and more specifically to the microfinance sector. Fills a void in ecosystem literature by designing a comprehensive ecosystem model of MFIs in India. Understanding the ecosystem would help market system actors and facilitators to understand what they have to do to achieve their objectives of participating in the ecosystem. Knowing their place in the ecosystem is an essential step in determining what they should do and how they should do it. In addition to MFIs, it could have important implications for policymakers, particularly the government, that are trying to achieve financial inclusion.



Purkayastha, D., Tripathy, T. and Das, B. (2020), "Understanding the ecosystem of microfinance institutions in India", Social Enterprise Journal, Vol. 16 No. 3, pp. 243-261.



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Copyright © 2020, Emerald Publishing Limited

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