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

Derin Kent and M. Tina Dacin

Journal of Business Venturing, 2013, vol. 28, issue 6, 759-773

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.

Keywords: Microfinance; Institutional theory; Poverty (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (44)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:28:y:2013:i:6:p:759-773

DOI: 10.1016/j.jbusvent.2013.03.002

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