Profit Empowerment: The Microfinance Institution’s Mission Drift

Abstract

This chapter concerns about the implications of imposed institutional discipline. When donors adopted a new approach regarding the sustainability of Microfinance Institutions (MFIs), they transformed the intervention structure and created drastic shift in the microfinance sector. The chapter proposes to launch the debate by concentrating on the Indian microfinance sector with a special focus on the State of Andhra Pradesh. It lay outs to what extent one can talk about the microfinance sector being dependent on donors. The chapter revisits the microfinance crisis that erupted in India in March 2006 by explaining the facts and interpretations given by the various actors in the sector. It raises some caution regarding the overwhelming push for MFIs to become financially self-sustainable, a push often than not exerted by donor organizations. Such a push has severe consequences, ranging from a substantial one such as a mission drift to the questionable practices employed by institutions. Keywords:Andhra Pradesh; microfinance institutions (MFIs); mission drift