Composition of Indian microfinance: a case for competing logics

Abstract

PurposeThis paper aims to understand how competing logics can co-exist in the organizational field of Indian microfinance.Design/methodology/approachThe paper uses the theoretical lens of an organizational field to understand the composition of the microfinance field. Using the definition of an organizational field, key players in Indian microfinance are identified and their interactions within the field are analysed to understand the emergence and co-existence of multiple logics. The data used for this paper are collected from published work on Indian microfinance.FindingsThe co-existence of competing logics is sustained through the creation of two sub-fields within Indian microfinance. Each of the sub-field is dominated by one institutional logic. The field originated in developmental logic of microfinance and gradually adopted the banking logic post-2000. The sub-fields are dominated by different organizational forms with different nature of interaction within the field.Research limitations/implicationsActors within the field would experience institutional complexity with lesser intensity because of the existence of two distinct sub-communities with individual logic. Dual logics can sustain itself independently provided these are embedded in two different sub-communities. Despite the emergence of a new logic, the previous logic can still remain relevant given the enabling support from institutional infrastructure.Practical implicationsThe manifestation of development and banking logics through practices and the belief system in Indian microfinance would offer useful insights for social entrepreneurs balancing the dual goals of hybrid organizations. Due to the sub-communities, a professional working with different forms of organization would experience little pressure to adjust to diverse logic and would also experience no or little identity conflict.Originality/valueThis paper focuses on the microfinance sector in India as an organizational field and explores the mechanism of co-existence of the dual goals of microfinance at the field level.