Nyongesa, A. K. Stella

Microfinance programmes are increasingly being relied upon by development organizations as well as governments worldwide to help alleviate poverty so as to achieve the Millenium Development Goals (MDG).  The traditional role of Microfinance Institutions (MFIs) is to promote the economic and social well-being of the poor, vulnerable and disadvantaged people in society, not only through economic empowerment but also social intermediation. Despite this, the goals of many MFIs seem to be primarily financial oriented, with hardly any emphasis on developing interventions to meet the social needs of their clients. This paper therefore, uncovers possible “mission drift” by establishing the balance between financial and social need satisfaction of clients with the diversity of Kenyan MFIs products. The discussion is based on an exploratory study of 10 MFIs operating in Kenya. The significance of this paper is to provide a basis for evaluating the original mission of MFIs and redefining the actual practices to reflect it. 

It also provides a justification for donors of MFIs to re-evaluate their criteria for funding particularly in developing countries to suit their MDG agenda.

Key Words:  MFI product diversity, MFI and Social Need, MFI and MDG