Microfinance Commercialisation, Challenges and Issues in Developing Countries: A Critical Literature Review

This paper aims at reviewing empirical literature on the performance and issues associated with commercialisation of microfinance institutions (MFIs). The popular approach believes that commercial-based operation can lead to financial self-sustainability without reducing the role to assist the poor. Although the growth in financial intermediation is evident, many commercialised MFIs remain dependence on subsidy and fail to achieve a greater outreach. Hence, this approach highly undermines the social mission of microfinance to reach the poorest of the poor