The microfinance schism

Leading advocates for microfinance have put forward an enticing 'win-win' proposition: microfinance institutions that follow the principles of good banking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated 'best practices,' but as a general proposition the vision is fully supported neither by logic nor by the available empirical evidence. Recognizing the limits to the win-win proposition is an important step toward reaching a more constructive dialogue between microfinance advocates that privilege financial development and those that privilege social impacts. (C) 2000 Elsevier Science Ltd. All rights reserved.