Selected Aspects in Microfinance Investments

Download or read book Selected Aspects in Microfinance Investments written by Sébastien Sägesser and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: There is an ongoing debate concerning the consequences of the commercialization of the microfinance industry. Some have claimed that the introduction of profit motives in the business model of microfinance institutions (MFIs) are making them shift away from their primary mission: poverty alleviation. In the literature, this is referred as mission drift. To give some empirical perspectives to the debate, this study used two distinct models; mean-variance spanning tests to assess diversification potential and Hausman-Taylor regressions to assess the relationship between profitability and depth of outreach. Although not providing a clear cut upon the existence of mission drift, the evidences found suggest that mission drift occurred for some MFIs and is occurring for others. Also, although microfinance is converging toward mainstream finance due to its growing commercialization, it is still possible to find investments giving both financial and social returns.