The microfinance schism

Leading advocates for microfinance have put forward an enticing "win-win" p roposition: microfinance institutions that follow the principles of good ba nking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated "best practices," but as a general propositi on the vision is fully supported neither by logic nor by the available empi rical evidence. Recognizing the limits to the win-win proposition is an imp ortant step toward reaching a more constructive dialogue between microfinan ce advocates that privilege financial development and those that privilege social impacts. (C) 2000 Elsevier Science Ltd. All rights reserved.