G4 Doctoral dissertation (monograph)
NGOs’ capacity building and mission drift : commercialization of microfinance programs and poverty reduction in Bangladesh (2020)
Khoda, S. (2020). NGOs’ capacity building and mission drift : commercialization of microfinance programs and poverty reduction in Bangladesh [Doctoral dissertation]. Jyväskylän yliopisto. JYU dissertations, 278. http://urn.fi/URN:ISBN:978-951-39-8270-6
JYU authors or editors
Publication details
All authors or editors: Khoda, Sher
eISBN: 978-951-39-8270-6
Journal or series: JYU dissertations
eISSN: 2489-9003
Publication year: 2020
Number in series: 278
Number of pages in the book: 1 verkkoaineisto (200 sivua)
Publisher: Jyväskylän yliopisto
Place of Publication: Jyväskylä
Publication country: Finland
Publication language: English
Persistent website address: http://urn.fi/URN:ISBN:978-951-39-8270-6
Publication open access: Openly available
Publication channel open access: Open Access channel
Abstract
The primary focus of this study is to analyze the capacity of non-governmental organizations (NGOs) to reduce poverty in Bangladesh. Due to shrinking of donor funding and emphasis on self-sustainability, NGOs in Bangladesh have moved toward commercialization by adding or shifting to microfinance programs from their development operations. However, there is an increasing debate about the motives of microfinance NGOs regarding profit seeking in the name of organizational sustainability and its possible negative impact on poor people. This study, therefore, investigates the following research questions: 1) Does microfinance reduce poverty? 2) To what extent are microfinance organizations capable of achieving both objectives of poverty reduction and organizational sustainability simultaneously? 3) Does the commercial approach of microfinance lead toward mission drift for NGOs? This study collected empirical data from three leading NGOs in Bangladesh. The primary method of data collection consisted of in-depth interviews of 50 microcredit clients and 20 credit officials, supplemented by focus group discussions with the microloan recipients. Observation as well as the use of a semi-structured questionnaire provided useful additional data for this study. Data organization and analysis followed primarily an inductive approach. The findings of this study suggest that microfinance organizations have, to some extent, drifted from their primary organizational mission, that is, from poverty reduction and women’s empowerment. The main expressions of this mission drift include high interest rates, many forms of service charges, management pressure on credit officers for achieving disbursement targets, and credit officers’ misconduct with credit clients. This study found that current microfinance operational systems have negative effects on people in poverty, leading, for example, them to being trapped in over-indebtedness and in a cycle of poverty. As a result, to get the optimum benefits of microfinance programs, NGOs need to build both their managerial and operational capacities.
Keywords: developing countries; poverty; development cooperation; financing systems; financial institutions; micro loans; incurring of debts; societal policy
Free keywords: microfinance; mission drift; poverty; capacity building
Contributing organizations
Ministry reporting: Yes
VIRTA submission year: 2020