An Exploration into the Double Bottom Line Commitments of Indian Microfinance Institutions

Abstract

Microfinance industry has emerged from a small domain institution to a broad tool for social development, as many success stories reveal its true potential for serving the society. Nevertheless, like any financial institution it has to fuel its needs in order to sustain its developmental activities. This is where the notion of double bottom line surfaces that adheres to a win-win situation for the microfinance institutions as well as the clients to whom they are serving. However, in reality there persist other unprincipled grounds that hamper this thought and diverges the activities of the MFIs towards attaining better and higher revenues leading to a trade-off. Our paper tries to objectify the presence of this as to what extent the double bottom line is realised in the MFIs of India. Further, we also try to find if there is a trade-off between financial performance and social performance. We have used a dataset comprising all the Indian MFIs reported online at MIX Market for the period from 2009 to 2013. The analysis is carried out on various indicators that resemble the performance and efficiency of the MFIs. The evidences suggest that Indian MFIs are adhering to the notion of double bottom line and the scale of outreach in terms of number of borrowers mainly guides their objectives.