Balancing commercial and social vision:
The social value of microfinance has long been taken for granted; the sector’s number one priority has essentially been to scale up. In the mid-1990’s, when attention was driven by growth and sustainability, focus was on the number of clients, profitability, subsidy, dependency, reduction of delinquency, and operational and financial sustainability. Through the mid-2000s, efforts to assess the contribution of microfinance to development were often denigrated by influential players in the sector, who did not want social concerns to “hijack” MFIs’ focus on financial performance. However, the aforementioned developments in recent years have led microfinance actors to make the social dimension of their activities more visible. The recognition of a double bottom line that marries financial and social performance is poised to become mainstream. This shift has revealed that good social outcomes are indeed compatible with financial performance as they improve client retention, repayment and staff productivity. Some even propose to relax regulatory constraints for institution that have proven their social utility or credit rating based incentives for institutions that contribute substantially to social objectives.