Document Type



microfinance; IPO; mission drift


Bryant University


This thesis analyzes whether or not there is a mission drift when microfinance organizations become publicly traded entities. One of the most debated criticisms of microfinance institutions (MFIs) today involves becoming for-profit organizations in attempt to raise more capital. Donor funding is limited for non-profit organizations and does not give an MFI much room to grow to serve a maximal number of people. The entry of for-profit microfinance institutions has a great deal of possibility in terms of generating scale, efficiency and innovation. Yet these for-profit institutions can easily lose track of their social mission to serve the poor and instead focus solely on profit driven incentives. This profit driven focus is defined as mission drift. There is a huge market to profit from those at the bottom of the economic pyramid thus concerning many critics of for-profit institutions. Current research has been done with the data from microfinance institutions all over the world looking specifically at for-profit versus non-profit MFIs. There seems to be a large amount of information around the debate of becoming a for-profit institution but not much analytical evidence currently proving that change in profit status leads to mission drift. My research takes this profit status debate a step further by looking at publicly traded microfinance companies. There are currently three publicly traded microfinance organizations according to JP Morgan: SKS in India, Compartamos Banco in Mexico, and Equity Bank in Kenya. This thesis includes a time series analysis looking at these companies both before and after the initial public offering has been issued, as well as a cross sectional component comparing each of these three companies with industry data in the MFI’s respective country and region.