Microfinance was intended to be revolutionary since it promised to tackle a poor household’s inability to access money in times of need. The poor would be able to access small lump sum loans by calling upon their friends and relatives to act as guarantors. This research explores how the promise of microfinance remains unfulfilled in two respects—operations and profit. We discuss the importance of heterogeneity and diversity of performance within microfinance organizations and an MFI’s approach to identify prospective clients.

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