The simultaneous achievement of financial and social objectives assigned to microfinance institutions\r\nis a challenge. Showing good financial performance (good profitability) and having a high depth of\r\noutreach (serving the poor) may be contradictory. Therefore, these \"banks for the poor\" are facing a\r\ntrade-off that can lead to mission drift. To verify the existence of this fact, we have analyzed the\r\nrelationship between financial performance and depth of outreach from a sample of 64 microfinance\r\ninstitutions of the Middle East and North Africa (MENA) region, from 2008 to 2010. Our results showed\r\nthat the relationship is neutral, but we were able to confirm the presence of a trade-off that stems from\r\nthe desire of microfinance institutions to reduce their portfolio at risk. However, we did not find that a\r\nhigher portfolio at risk is associated with poorer clients, and hence a not justified mission drift. We can\r\ntherefore conclude that microfinance institutions can well and truly achieve their double objective\r\n(social and financial) and thus fulfill their ââ?¬Å?ultimate promiseââ?¬Â.
Loading....