In microfinance financial and social objectives are not mutually exclusive

This study examines relationships between the financial efficiency and social efficiency of microfinance institutions (MFIs) in Cambodia. Applying Data Envelopment Analysis (DEA) to 14 MFIs, we find that financially efficient, for profit MFIs are no less efficient at reaching the poor than non-profit ones. Larger MFIs appear more efficient at reaching the poor while smaller MFIs are more profitable. Cambodian MFIs are becoming less socially efficient over time while increasing their profitability. This could reflect mission drift as MFIs improve financial efficiency but focus less on serving the most clients possible. Our findings support the notion that financial and social objectives are not mutually exclusive but suggest that stakeholders should ensure that social outcomes are maintained.

That is from the new paper: Are Profitable Microfinance Programs Less Efficient at Reaching the Poor? A Case Study in Cambodia by Crawford et al.