A Probe into the Double Bottom Line Commitments of Indian Micro Finance Institutions

As an emerging area of financial services microfinance has many success stories that reveal the huge potential for serving the society. However, like any other financial organization micro finance institutions (MFIs) have to survive in addition to fund their needs and wants. The idea of double bottom line emerges from this domain where a win-win situation would be attained by the microfinance for themselves as well as the clients. Yet, in reality, there are other setbacks associated with it that show its dark side. In this paper, we try to explore the presence of this and the extent to which the double bottom line is met by the MFIs of India. Further, if this is not met whether that adheres to a trade-off between financial performance and social performance. We have used a dataset comprising all the Indian MFIs reported in "mixmarket" for the period from 2009 to 2013. The analysis is carried on various indicators that resemble the performance and efficiency of the MFIs. In addition to social performance and financial performance indicators, our study also includes financial structure indicators, revenue indicators, and efficiency ratios to gather a better inference into the operations of the MFIs. The gross loan portfolio (GLP) of the industry shows 12.41% growth whereas the average loan size (ALS) shows a 7.37% growth indicating a possible trade-off. The preliminary evidence suggest that there might be ownership influence in the operations of the MFIs where trade-off are likely observed in non-NGO MFIs in contrast to NGO-MFIs