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Can Microfinance Institutions That Are Financially Sustainable Also Demonstrate A Commitment To Bringing Positive Social Change (2014)

The founder of microfinance once made the bold claim that poverty would one day be relegated to a museum of history. However, almost 40 years after the model was introduced, many of the world’s poor in developing countries still struggle to survive. This dissertation examines some of main issues surrounding the microfinance industry today, one of which is increased commercialisation, suggested ultimately by a lack of focus on the original social mission to do no harm. The key theme of this work is therefore to explore how the impact of microfinance can be ultimately measured in terms of social performance and whether there is an ultimate trade-off against financial sustainability.

Key discussions are presented in a review of the current literature which includes debates on the most efficient methods of social data collection. Data is presented on almost 75 million individual borrowers to build a picture of the current state of social reporting. The data is analysed to identify an ideal sample profile of a microfinance lender in terms of financial reporting and an attempt made to correlate the social and financial data together.

The dissertation concludes that there is no definitive association between the financial profile of the sample data and a higher level of social reporting. 

  • Social performance questionnaire sent to institutions by the Microfinance Information Exchange
  • Breakdown of goals under social responsibility to clients

It has been argued that a microfinance institution (MFI) which concentrates on financial income alone cannot be socially effective. Therefore, it could it be asserted that an efficient microfinance institution should ideally combine both financial performance alongside meaningful social reporting. The main aim of this research will be to explore the relationship between a financially independent MFI and its social impact. Specifically, the following hypothesis will be explored:

H1 : Can a financially sustainable MFI also be socially responsible?

As will be introduced in the analysis and subsequent discussion chapter, this dissertation will look to provide a response to the above question using a complete dataset of 840 microfinance institutions (MFIs). In order to provide a broad representation of microfinance, the data used to examine the above hypothesis represents research collected from almost 90 countries across six geographical areas for one financial year.

The objective of the paper, therefore, is to answer the above hypothesis and propose a potential profile of an MFI which is both financially and socially responsible, if possible.


  • 16,000 words – 80 pages in length
  • Excellent use of literature
  • Good analysis of subject area
  • Well written throughout
  • Ideal for accounting and finance students

1 – Introduction
Research Hypothesis
Dissertation Structure

2 – Literature Review
Early Studies
Randomised Control Studies
Non-Randomised Control Studies
Commercialisation
Consumption Loans
Social Reporting

3 – Methodology
Aims and Objectives
Background to the Data Sample
Data Organisation
Analysis Organisation
Validation of MIX data
Methodological Limitations

4 – Analysis and Results
Analysis Data
Analysis of LATAM Profile

5 – Discussion of Results
Discussion
Limitations of the Analysis

6 – Conclusions
Research Discussion
Existing Literature Support
Conclusion

References

Appendices

Microfinance and Positive Social Change Dissertation
Microfinance and Positive Social Change Dissertation

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