What balance between financial sustainability and social issues in the microfinance sector?

published in September 2009
What are the best practices for financial management and governance? What priorities must MFIs set in order to maintain their social mission? This issue compares experts’ views on the topic.
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The overarching virtue of microfinance is that in recent years it has managed to demonstrate that it is not only possible and necessary to implement services tailored to the poorest – it can also be profitable. Indeed, to quote the “Bottom of the Pyramid” concept coined by the economists S.L. Hart and C.K. Prahalad, moving into the market of lowincome populations – and serving them – may constitute “the biggest business opportunity in the history of commerce” and at the same time helps combat poverty. Microfinance would seem to embody this concept. Although it may lead to higher costs in order to reach the poorest borrowers, this can be offset by the profitability of the investments financed.

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