Gaamaa Hishigsuren
Student, Southern New Hampshire University
Gaamaah@aol.com

“Scaling up and mission drift: can microfinance institutions maintain a poverty alleviation mission while scaling up?”

Paper Abstract:
Microfinance has received increasing attention as an effective strategy to alleviate poverty by providing financial services to the poor who have little or no access to capital and formal financial services, as well as providing additional support services such as training on education, healthcare and other basic needs. Yet despite the increasing attention and reputation that microfinance institutions (MFIs) have achieved, their contribution to poverty alleviation on a global level remains limited. To meet this large unmet demand, and to provide for their own long-term sustainability, MFIs are facing increasing pressure to expand their outreach, grow and enhance their impact. The pressure to achieve financial sustainability and scale up often poses a dilemma to many MFIs: to choose between following their original poverty alleviation mission and pursuing the path to achieve financial sustainability. The purpose of this paper is to review the existing literature on how MFIs adhere to the social mission of reaching the poor while scaling up. The findings indicate that currently there is no reliable indicator of mission drift and empirical study on the implications of scaling up on the ability of MFIs to maintain the social mission. The paper suggests future studies should develop more reliable indicators of mission drift and seek to educate some of the mechanisms that lead to mission drift and, more importantly, those mechanisms that help retain mission while scaling up. Such studies should provide a framework and a set of indicators and tools that may be used by researchers as well as practitioners to measure the fulfillment of social mission.

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