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Understanding social performance: a ‘practice drift’ at the frontline of Microfinance Institutions in Bangladesh

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JournalDevelopment and change
DateSubmitted - 2016
DateAccepted/In press - 1 May 2017
DateE-pub ahead of print - 6 Mar 2018
DatePublished (current) - 6 Mar 2018
Number of pages32
Early online date6/03/18
Original languageEnglish

Abstract

This article examines the role of microfinance staff and procedures in enabling microfinance's social mission. It does so primarily through studying institutional ruling relations and practices in rural Bangladesh. Attempting to move away from the linear and deterministic approaches of impact studies, it ethnographically scrutinizes the everyday practices of implementers. Findings point to the emergence of systemic practices that jeopardize microfinance institutions' potential to perform their social mission. These include low client-selection standards, hard selling of loans and forceful loan renewal, little follow-up on loan use, and abusive and violent client-retention and repayment-collection strategies. This is conceptualized as a 'practice drift' as distinct from the commonly reported 'mission drift'. Rather than stemming from planned, top-down changes in institutional mission and strategy, practice drift emerges from a displacement of decision-making processes to the branches. The article argues that observed changes in microfinance practice are enabled by decentralized structures and management systems that leave the choice of tactics used to achieve targets to the discretion of field staff.

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© 2018 The Authors.

    Research areas

  • Microfinance, Bangladesh, street-level bureaucracy, NGO, Poverty, organisational capacity

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