Journal Press India^®

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The success of the microfinance movement is beyond doubt. However, as the scope of the sector increased and commercialised, some problems of it became evident. Issue of profitability and sustainability of Microfinance institutions (MFIs) and, use of external capital by them are the two most debatable issues of the microfinance sector. The current study investigates these issues by targeting MFIs and consultants of microfinance sector located in UK. These MFIs and consultants have operations in different poor and developing countries. The study found that believing that MFIs can alone eliminate poverty is a fallacy. Any such belief by the policymakers will make further delay in eradicating poverty. The study also found that financial sustainability of microfinance seems to remain unachievable for most of the MFIs and, that there are fair chances of having trade-off between financial performance and social performance for those MFIs. On this line of thought, the study concludes by arguing that microfinance cannot be treated only as a substitute of the traditional financial services. ​

Keywords

Microfinance, mission drift, poverty eradication, sustainability

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