Commercial Microfinance and Social Responsibility: A Critique

Working within the logic of maximising investor returns, the strategic focus of Indian microfinance institutions seems to have shifted from serving the poor borrowers to chasing profits. The commercial transformation of MFIs has been accompanied by changes in the structure of ownership, management and nature of their stakeholder commitment. This essay discusses some of the critical inadequacies in the approaches advocated and currently practised by the commercial MFIs in order to restore the sector’s focus on poor borrowers.