Revista da Academia de Gestão Estratégica

1939-6104

Abstrato

Achieving Financial Performance and Social Performance of Microfinance Institutions: Risk of Mission Drift

Mohd Sobri Minai, Yusnidah binti Ibrahim, Hisham Bin Mohammad, Sharifah Norzehan Syed Yusuf

Microfinance Institutions (MFIs) play an important role in alleviating poverty. Importantly, the key measure of success for any MFI is financial self-reliance. Therefore, improving profitability may secure the financial sustainability of MFIs, but it raises concerns about shifting their mission to help the poorest. This phenomenon is generally referred to as mission drift in the microfinance literature. This review study critically examines the major concerns based on a literature review and deliberates on how MFIs can retain their social mission while making good profits. Moreover, it also discusses the role of institutional investors in preventing mission drift. This study will benefit the MFIs, investors, borrowers, NGOs and governments.

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