IDEAS home Printed from https://ideas.repec.org/a/eee/jbvent/v28y2013i6p759-773.html
   My bibliography  Save this article

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

Author

Listed:
  • Kent, Derin
  • Dacin, M. Tina

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.

Suggested Citation

  • Kent, Derin & Dacin, M. Tina, 2013. "Bankers at the gate: Microfinance and the high cost of borrowed logics," Journal of Business Venturing, Elsevier, vol. 28(6), pages 759-773.
    • Handle: RePEc:eee:jbvent:v:28:y:2013:i:6:p:759-773
    DOI: 10.1016/j.jbusvent.2013.03.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0883902613000335
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusvent.2013.03.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jay K. Rosengard, 2004. "Banking on Social Entrepreneurship : The Commercialization of Microfinance," Mondes en développement, De Boeck Université, vol. 126(2), pages 25-36.
    2. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    3. Greg Van Kirk, 2010. "The MicroConsignment Model: Bridging the "Last Mile" of Access to Products and Services for the Rural Poor (Innovations Case Narrative: The MicroConsignment Model)," Innovations: Technology, Governance, Globalization, MIT Press, vol. 5(1), pages 101-127, January.
    4. Rodolphe Durand & Hayagreeva Rao & Philippe Monin, 2003. "Institutional Change in Toque Ville: Nouvelle Cuisine as an Identity Movement in French Gastronomy," Post-Print hal-00480858, HAL.
    5. Hermes, Niels & Lensink, Robert & Meesters, Aljar, 2011. "Outreach and Efficiency of Microfinance Institutions," World Development, Elsevier, vol. 39(6), pages 938-948, June.
    6. Beatriz Armendáriz & Jonathan Morduch, 2010. "The Economics of Microfinance, Second Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262014106, December.
    7. Royston Greenwood & Amalia Magán Díaz & Stan Xiao Li & José Céspedes Lorente, 2010. "The Multiplicity of Institutional Logics and the Heterogeneity of Organizational Responses," Organization Science, INFORMS, vol. 21(2), pages 521-539, April.
    8. Anis Chowdhury, 2009. "Microfinance as a Poverty Reduction Tool—A Critical Assessment," Working Papers 89, United Nations, Department of Economics and Social Affairs.
    9. Hayagreeva Rao, 1994. "The Social Construction of Reputation: Certification Contests, Legitimation, and the Survival of Organizations in the American Automobile Industry: 1895–1912," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 29-44, December.
    10. Tchakoute-Tchuigoua, Hubert, 2010. "Is there a difference in performance by the legal status of microfinance institutions?," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(4), pages 436-442, November.
    11. Hayagreeva Rao & Philippe Monin & Rodolphe Durand, 2003. "Institutional change in toque ville : Nouvelle cuisine as an identity movement in French gastronomy," Post-Print hal-02311672, HAL.
    12. Khawari, Aliya, 2004. "Microfinance: Does it hold its promises? A survey of recent literature," HWWA Discussion Papers 276, Hamburg Institute of International Economics (HWWA).
    13. Copestake, James, 2007. "Mainstreaming Microfinance: Social Performance Management or Mission Drift?," World Development, Elsevier, vol. 35(10), pages 1721-1738, October.
    14. Paul Tracey & Nelson Phillips & Owen Jarvis, 2011. "Bridging Institutional Entrepreneurship and the Creation of New Organizational Forms: A Multilevel Model," Organization Science, INFORMS, vol. 22(1), pages 60-80, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    2. Hermes, Cornelis & Hudon, M., 2018. "Determinants of the Performance of Microfinance Institutions: A Systematic Review," Research Report 2018008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    3. Leif Atle Beisland & Kwame Ohene Djan & Roy Mersland & Trond Randøy, 2021. "Measuring Social Performance in Social Enterprises: A Global Study of Microfinance Institutions," Journal of Business Ethics, Springer, vol. 171(1), pages 51-71, June.
    4. Widiarto, Indra & Emrouznejad, Ali, 2015. "Social and financial efficiency of Islamic microfinance institutions: A Data Envelopment Analysis application," Socio-Economic Planning Sciences, Elsevier, vol. 50(C), pages 1-17.
    5. Patrick Reichert, 2018. "A meta-analysis examining the nature of trade-offs in microfinance," Oxford Development Studies, Taylor & Francis Journals, vol. 46(3), pages 430-452, July.
    6. Sefa Awaworyi Churchill, 2020. "Microfinance financial sustainability and outreach: is there a trade-off?," Empirical Economics, Springer, vol. 59(3), pages 1329-1350, September.
    7. Anderson-Gough, Fiona & Edgley, Carla & Robson, Keith & Sharma, Nina, 2022. "Organizational responses to multiple logics: Diversity, identity and the professional service firm," Accounting, Organizations and Society, Elsevier, vol. 103(C).
    8. Olivier Cristofini, 2021. "Toward a Discursive Approach to the Hybridization of Practice: Insights from the Case of Servitization in France," Post-Print hal-03886255, HAL.
    9. Wright, April L. & Zammuto, Raymond F., 2013. "Creating opportunities for institutional entrepreneurship: The Colonel and the Cup in English County Cricket," Journal of Business Venturing, Elsevier, vol. 28(1), pages 51-68.
    10. Wu, Xiaojie & Tan, Xiaoxia & Wang, Xiuqiong, 2023. "The institutional logics perspective in management and organizational studies," Journal of Business Research, Elsevier, vol. 167(C).
    11. A. Blanco-Oliver & A. Irimia-Diéguez, 2021. "Impact of outreach on financial performance of microfinance institutions: a moderated mediation model of productivity, loan portfolio quality, and profit status," Review of Managerial Science, Springer, vol. 15(3), pages 633-668, April.
    12. Bibi, Uzma & Balli, Hatice Ozer & Matthews, Claire D. & Tripe, David W.L., 2018. "New approaches to measure the social performance of microfinance institutions (MFIs)," International Review of Economics & Finance, Elsevier, vol. 53(C), pages 88-97.
    13. Tammar B. Zilber, 2011. "Institutional Multiplicity in Practice: A Tale of Two High-Tech Conferences in Israel," Organization Science, INFORMS, vol. 22(6), pages 1539-1559, December.
    14. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    15. Serrano-Cinca, Carlos & Gutiérrez-Nieto, Begoña, 2014. "Microfinance, the long tail and mission drift," International Business Review, Elsevier, vol. 23(1), pages 181-194.
    16. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    17. Blanco-Oliver, Antonio & Irimia-Dieguez, Ana & Reguera-Alvarado, Nuria, 2016. "Prediction-oriented PLS path modeling in microfinance research," Journal of Business Research, Elsevier, vol. 69(10), pages 4643-4649.
    18. Antoaneta P Petkova, 2016. "Standing Out or Blending In? The Formation of New Firms’ Legitimacy and Reputation under Different Levels of Market Uncertainty," Corporate Reputation Review, Palgrave Macmillan, vol. 19(1), pages 22-34, February.
    19. Gashaw Tadesse Abate & Carlo Borzaga & Carlo Borzaga, 2014. "Cost efficiency and outreach of microfinance institutions in Ethiopia: Do they contrast with financial cooperatives?," Euricse Working Papers 1465, Euricse (European Research Institute on Cooperative and Social Enterprises).
    20. Olga Gorelkina & Ioanna Grypari & Erin Hengel, 2019. "One strike and you’re out! The Master Lever’s effect on senatorial policy-making," Working Papers 201906, University of Liverpool, Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbvent:v:28:y:2013:i:6:p:759-773. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusvent .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.