Bankers at the gate: Microfinance and the high cost of borrowed logics

Derin Kent*, M. Tina Dacin

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

76 Citations (Scopus)

Abstract

In this paper we examine how the interaction between influences of commercial banking and poverty alleviation shaped the evolution of modern microfinance. Using institutional theory as a lens, we observe that the commercial banking logic increasingly displaced the microfinance field's foundational poverty alleviation and development principles over time. We argue that this process of displacement can occur inadvertently as organizations that embody multiple logics draw disproportionately on only one of those logics when developing legitimating accounts of their activity to stakeholders. Furthermore, we introduce the concept of permeability - the extent to which the elements of a logic are ambiguous and loosely coupled - to explain why some logics may be more or less open to the influence of other logics. We conclude by discussing implications for entrepreneurship and poverty alleviation more generally.

Original languageEnglish
Pages (from-to)759-773
Number of pages15
JournalJournal of Business Venturing
Volume28
Issue number6
DOIs
Publication statusPublished - Nov 2013
MoE publication typeA1 Journal article-refereed

Keywords

  • Institutional theory
  • Microfinance
  • Poverty

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