Evaluating Mission Drift in Microfinance

Evaluation Review
Volume 31 Number 3
June 2007 203-260
© 2007 Sage Publications
Evaluating Mission Drift 10.1177/0193841X06297886
http://er.sagepub.com
in Microfinance hosted at
http://online.sagepub.com
Lessons for Programs

With Social Mission
Gaamaa Hishigsuren
Mennonite Economic Development Associates
The article contributes to a better understanding of implications of scaling up

on the social mission of microfinance programs. It proposes a methodology to
measure the extent, if any, to which a microfinance program with a poverty
alleviation mission drifts away from its mission during rapid scaling up and
presents findings from a field research using the proposed methodology at
Activists for Social Alternatives (ASA), a microfinance organization that
serves poor women in rural India. The findings indicate that mission drift is
not a result of deliberate decisions by the management or board but rather is
a result of the challenges posed by the scaling-up process. At times, changing
trends in social outcomes were not obvious, and management was not aware
of the changes indicated by the proposed measures of social performance.
Keywords: microfinance; mission drift; poverty alleviation; scaling up
M icrofinance refers to the provision of small-scale financial services

(loans, savings, insurance, etc.) to lower income individuals; this
client base is also referred to as marginalized by mainstream financial insti-
tutions. Such programs have been embraced around the world as an impor-
tant strategy for poverty alleviation. Studies have demonstrated the poverty
alleviation impacts of microfinance services. These include reaching the poor,
lifting their economic well-being and empowerment, especially of women
(Ashe 2000; Fisher and Sriram 2002; Khandker 2002; Robinson 2002;
Simanowitz and Walter 2002; Todd 2000).
Over the past decade the microfinance field has expanded substantially in
terms of number of institutions and the size of these institutions. Microcredit
Summit reported (Summit 2005): “As of December 31, 2004, 3,164 micro-
credit institutions have reported reaching 92,270,289 clients, 66,614,871 of
203
204 Evaluation Review
whom were among the poorest when they took their first loan. Of these
poorest clients, 83.5 percent, or 55,622,406 million, are women.”
Although such scaling up is applauded for its progress in spreading the
benefits of microfinance services to a greater number of the poor and for
contributing to financial sustainability of the microfinance institutions, there
is a concern that scaling up may lead to a drift from the microfinance insti-
tutions’ (MFIs) original poverty alleviation mission; that is, efforts to reach
a significant scale by securing financial sustainability may lead to a tendency
to provide larger loans to clients who are less poor and employing stricter
loan-screening procedures. This may in turn result in decreased attention to
and exclusion of the so-called riskier and poorer clients. It is, therefore,
important to understand whether MFIs can scale up without drifting away
from serving the poor and thereby achieving the MFIs’ primary poverty alle-
viation mission. How does scaling up affect the poverty alleviation mission?
How can a microfinance program measure whether or not—and to what
extent—it is drifting away from its social mission? These are important
questions to not only microfinance practice but also to other development
programs with a social mission.
This article attempts to address the knowledge gap in the literature and
proposes a methodology to measure the mission drift during rapid scaling
up. In particular, the article presents a methodology and findings of a study
at a microfinance program, Activists for Social Alternatives (ASA), to
measure the implications of rapid scaling up on the social mission of this
program. ASA, which is based in India, had a clear commitment to poverty
alleviation from its inception. As indicated above, though many MFIs may
claim their mission is poverty alleviation, few define the segment of the
poor they are trying to serve and, thus, have vague targeting goals. The
types of impact they expect to have on their clients to improve their living
standards are also not clearly defined. Being aware of this ambiguity in the
poverty alleviation mission of MFIs, this article has chosen to focus on the
study of a MFI that had clearly defined, before the scaling-up process, its
target group in measurable terms and spelled out in the mission the types
of impact it expects to have on poverty alleviation for its clients. This clear
targeting and poverty alleviation commitment makes it possible to mea-
sure the changes in its poverty alleviation mission during and after the
scaling-up process. Although MFIs operate in different markets with dif-
ferent client groups, the researcher, in the current study, takes a stance that
for institutions to be defined as microfinance institutions they must have a
poverty alleviation mission because microfinance has primarily been pro-
moted and described as one of the strategies for poverty alleviation.
Hishigsuren / Mission Drift in Microfinance 205
Literature Review
The literature on the process of scaling up largely focuses on organi-

zational management issues associated with scaling up, such as human
resources, financial management, systems, and organizational develop-
ment (Churchill 1997; Gonzalez-Vega et al. 1997; Howes and Sattar 1992;
Malhotra and Fidler 1995; Otero and Rhyne 1994). There is no detailed
study that explores the dynamics of scaling up and its implications for
the poverty alleviation mission: What are the changes in the profile of
clients served, and what services are provided? The preponderance of
studies that looked at this question were based on exploratory, unsys-
tematic accounts such as personal experience, observation, review of sec-
ondary materials, and discussions with few key people in an organization
(Campion et al. 2001; Cherogony 2001; Christen 2000; Katsuma 1997;
Rhyne 2001).
The literature that does discuss implications for the social mission looks
at the change in the poverty level of MFIs’ new clients, commonly referred
to as depth of outreach (Schreiner 2002). There are a number of different
measures used to assess the depth of outreach or the poverty level of clients
served by MFIs. Average loan size is a commonly used indicator. It is also
a readily available datum in MFIs. However, a drawback of studies using
average loan size as an indicator of mission drift is that there are different
approaches to calculating average loan size. Even when it is measured in
the same way, it does not necessarily reflect the level of poverty of the
clients. There is evidence that larger businesses sometimes apply for small
loans. Conversely, conditions may improve for poor clients who graduate to
larger loans.
Furthermore, Rhyne (1998) asserted that there is no way to tell the distri-
bution of loan sizes (i.e., whether institutions have many small loans in their
portfolio) because only average loan sizes have been reported. Campion and
White (1999) argued that an increase in loan size can be due to entrance into
new markets, including the targeting of small businesses and/or growth of
active clients’ loan-size requirements. They argued that even MFIs that have
shown an increase in average loan size have continued to expand their out-
reach to the micro-enterprise sector. These conflicting findings suggest that
average loan size is not a sufficient indicator of whether or not the trans-
formed institutions drift away from their original target clientele and move to
more affluent clients.
Method
The inquiry relies on multiple sources of evidence for confirmation of

observed trends. As such, the current study uses a mixed method for data
gathering to triangulate various data sources recognizing that all methods
have limitations, and triangulation allows neutralizing or canceling biases of
other methods (Creswell 2003). The main features of the methodology are:
(a) use of multidimensional pre–post quantitative data to show whether or
not there is mission drift at ASA; (b) use of mixed methods, some quantita-
tive but mostly qualitative, to identify challenges that lead to drift while scal-
ing up and strategies that inhibit drift, based on whether there is mission drift
or not (and possibly for areas showing drift even if ASA in general is not
drifting); (c) use of purposive sampling to explore selected themes of pri-
mary findings and better understand what is going on. Use of mixed meth-
ods consists of surveys with 420 current and former clients, 18 focus group
discussions (FGDs) with 216 current and former clients, interviews with 3
front-line staff, 4 board members, 3 representatives of funding agencies, and
2 groups of management staff (20 in total). In addition, the current study
examines key literature works by others in the field and archival documents
of ASA and writings describing the larger socioeconomic and political con-
text in which ASA operates.
Propositions
As argued in the previous sections, scaling up of microfinance organiza-
tions may lead to a drift from their original poverty alleviation mission. The
literature refers to two major components of poverty alleviation mission of
MFIs: reaching the poor and alleviating poverty. These are captured in three
dimensions of outreach: depth, quality, and scope of outreach. Based on these
dimensions of poverty alleviation mission, the current study is testing the fol-
lowing propositions to measure mission drift:
Proposition A: Depth of outreach or poverty outreach: Due to scaling up, MFIs

tend to move up the market and serve more affluent clients.
Proposition B: Quality of outreach: When organizations scale up, there is a ten-
dency to require a field officer (FO) to handle a larger number of clients to
reduce transactional costs. Such an increased caseload may lead to a fewer
number of hours spent with each client and, thus, lower-quality service, less
personal attention to each individual client, and decreased client satisfaction
leading to clients’ desertion (exiting the program).
Proposition C: Scope of outreach: Due to scaling up, MFIs are likely to special-
ize in a narrower range of purely financial services and cut down on some
services, especially the ones that are not producing any financial profit, such
as social and political empowerment programs. This implies less ability of
the MFI to meet the diverse needs of clients to help them move out of
poverty. As recognized, poverty is a multidimensional phenomena and can-
not be addressed only through financial means.
Measures of Mission Drift

Based on the three propositions above, the effects of scaling up on the
poverty alleviation mission of ASA are measured in three key dimensions:
• depth of outreach or poverty outreach: poverty level of clients at entry to the

program
• quality of outreach: the level of satisfaction with the services and products
• scope of outreach: the range of services offered in terms of variety and quan-
tity (financial and nonfinancial)
The following set of indicators is developed in each of the dimensions to

measure mission drift based on the literature review and the available his-
torical data at the case study organization. In each group, there are several
quantitative indicators.
Measures of Depth of Outreach or Poverty Level

Average size of first loans as a percentage of GDP (gross domestic product).
Average size of loans is a commonly used indicator of client poverty level. It is
also readily available in all microfinance organizations. However, due to the
previously mentioned drawbacks of using the average loan size as a measure of
depth of outreach, this research proposes to use the average size of first loans
(not all loans) in combination with other indicators for measuring the poverty
level of ASA’s members.
Housing Index. ASA among many other MFIs uses the Housing Index
as its primary poverty-targeting tool. This index is created through the fol-
lowing methodology at ASA: A field staff person walks systematically
through the selected villages. He or she looks at each house and compound,
eliminating those that are large, in good condition, and made from expen-
sive materials. Houses that may or may not contain poor or poorest house-
holds are indexed or scored based on locally relevant criteria. From the
inception, ASA has used two cut-offs to define three categories of poor and
set their primary and secondary target groups. The distinctions are made
(a) between the poor and nonpoor and (b) of those identified as poor, between
poorest and moderately poor. On average, it takes field staff 5 mins to index
a house and determine an eligibility score. A cut-off score is established to
separate the houses of the poor from those of the nonpoor. Then another
cut-off score is established within the poor category to separate the houses
of the poorest from those of the poor. Initially, a sample study was carried
out by the MFI to validate the cut-off score against household incomes.
Houses below the cut-off between poor and nonpoor scores are listed and
roughly mapped as the field staff moves through the village.
Particulars Details
1 Size of building Big (4) Medium (2) Small (0)

2 Structure of Firm (4) Medium (2) Bad (0)
condition
3 Roof material RCC and/or Tiles and/or
Pucca (4) asbestos (2) Thatch (0)
4 Wall material Brick with Brick with
cement (4) mud (2) Mud (0)
Cut-off points:
Greater than 8 points Less poor

4–8 points Poor
Less than 4 points Poorest
Those who are assigned a housing index equal to or below 4 points are
considered to be the poorest and are therefore targeted as a qualified member.
Those with a score of above 4 are screened through additional indicators if
they qualify as secondary target members: whether the value of all assets in
the household indicates poverty; whether or not she is on the below poverty
line (BPL) as established by the state government; and whether the ration
card indicates she is eligible for government subsidy (every 5 years, the state
government assesses the poverty level of each household and puts a stamp on
those who are above the poverty line, indicating those who are without any
stamp on their ration card are below poverty line and thus are eligible for gov-
ernment subsidy). In general, ASA accepts those who are up to 8 points using
the combination of these screening criteria. This targeting commitment was
made at the onset of the microfinance program of ASA, and thus, in this
research the same indicators are used to measure the changes in the poverty
targeting of ASA during and after scaling up.
Monthly household income per capita. Income is a common measure of

poverty as a flow of resources that enables individuals and households to
sustain their living. However, it has drawbacks such as not being able to
capture the stock of other resources. Also, there is a high probability of
human errors in reporting and recording income data. In the informal sec-
tor, income is usually not regular; and thus, it is almost impossible to accu-
rately record. An average monthly household income per capita is used in
the current study in combination with other measures. To reduce effects of
inflation, all income figures in local currency, rupees, are converted into
real terms using 1986-1987 as a base year.
Caste. Caste is used as an additional indicator of poverty level of new

clients who have joined ASA over time. Dalit or the lowest caste people in
India are the most oppressed, marginalized group. Within dalits, there are two
main categories: scheduled caste/tribe (SC/ST) and backward caste/other
backward caste (BC/OBC). Of the two, the SC/ST people are dalits and are
socially most marginalized, whereas the BC/OBC people are the bottom
and/or lowest level of nondalit caste and are economically marginalized. In
the mission of ASA, the focus on dalit uplift receives significant emphasis
along with the lowest level of nondalits. The current study will use an indi-
cator to measure the change over time in the proportion of dalit members and
lowest level of nondalits.
Geographical distribution of membership. Poverty is generally more preva-

lent in rural areas than in urban areas because of access to infrastructure,
resources, services, and markets (Valenzuela 1998). When MFIs scale up,
there is a tendency to focus on urban or high-density areas to reduce transac-
tion costs (Sustainable Banking with the Poor 2002). Thus, this research pro-
poses to compare the proportion of rural members versus urban before and
after scaling-up process.
Sectoral distribution of loans. Some sectors such as agriculture and manu-

facturing are considered riskier than others. Agriculture has a high seasonal
demand and is dependent on natural factors, such as climate, natural resources,
and so on. Despite its risk, agriculture provides a living for many poor people
in rural areas around the world. Manufacturing is also considered risky and has
been avoided by conventional lenders because of its slow turnover and require-
ment for large capital investment. Given that these two sectors are considered
riskier, there is a possibility for MFIs to move away from lending to these two
sectors (Sustainable Banking with the Poor 2002). On the other hand, many
poor people are dependent on these sectors for their living. If MFIs shy away
from serving poor people who are engaged in these sectors, it will exclude the
poor from microfinance services, hence negatively affecting the social mission
of MFIs to reach and serve the poor. Thus, the current study proposes to look
at changes in the proportion of loans by sectors, such as trade, agricultural, and
manufacturing loans.
Quality of Outreach
The quality of outreach is determined by five indicators: (a) the level of
members’ overall satisfaction with the organization, (b) the average number
of hours available for working with each member, (c) caseload (the number
of members per FO), (d) the quality of member service (e.g, personal atten-
tion, business counseling, help with family-related social issues, etc.) as per-
ceived by members, and (e) the percentage of dropouts due to reasons related
to ASA’s scaling up. As a poverty alleviation mission-driven organization,
ASA emphasized the importance of high-quality service for the poor, espe-
cially in terms of spending time with each member, providing business and
personal advice, helping clients network with each other, providing informa-
tion on market prices, and facilitating access to public services, among oth-
ers. When organizations scale up, there is a tendency to require FOs to handle
a larger number of clients to reduce transactional cost. Such an increased
caseload may lead to a fewer number of hours spent with each client and thus,
lower-quality service. Therefore, it is important to understand whether after
scaling up, ASA has been able to maintain the same quality service and the
level of personal attention that they provided when the organization was
smaller.
Scope of Outreach
The specific indicators used to measure changes in the scope of services
include the number and type of financial services and nonfinancial services
(e.g., election campaigns and rights-based groups) before and after scaling
up. In its initial mission statement, ASA emphasized the importance of not
only economic but also social and political empowerment of the poor.
Therefore, it has been providing a number of financial and nonfinancial
services. The latter services include community organizing around specific
rights-based issues (such as land tenants’ rights, gem-cutters’ rights, women’s
rights, etc.) and education on electoral processes (election campaigns). This
holistic approach is consistent with the multidimensional theories of poverty:
not only economic but also social and political empowerment is crucial in
alleviating poverty (see Table 1).
Table 1
Indicators Used to Measure Mission Drift
Indicator Definition
Depth of outreach
Average size of loans Average size of loans (in rupees real terms)
Household income Average monthly household income per capita (in rupees
real terms)
Poorest Percentage of new members with housing index of 4 points
or below
Poor Percentage of new members with housing index between
4 and 8 points
Less poor Percentage of new members with housing index of 8 points
and above (the scale is 0–16)
Dalit Percentage of new members who belong to lower caste, such
as Scheduled Caste, Scheduled Tribe, Backward Caste, and
Other Backward Caste
Nondalit Percentage of new members who belong to higher caste, such
as Forward and Other Caste
Rural members Percentage of rural members
Agriculture loans Percentage of loans for agricultural purposes
Quality of outreach
Caseload Total number of active members divided by the total number
of field officers
Time per member Total number of working hours per field officer is divided by
the average number of members per field officer
(hours/caseload) in minutes
Satisfaction with overall Percentage of respondents said overall quality of service
quality of service “excellent” or “good”
Satisfaction with variety Percentage of respondents said variety of products and
of services service “excellent” or “good”
Satisfaction with Percentage of respondents said field officer quality of service
member service “excellent” or “good”
Scope of outreach
Financial services Number of financial services
Financial products Number of financial products
Overview of Information Used

In the current study, multiple sources of qualitative and quantitative infor-
mation are used to answer the key research questions raised above. They are
grouped in four main categories:
(a) Contextual information on ASA including information on the origin, set-

ting, location, history, philosophy, purpose, characteristics of borrowers,
organization, administration and staffing, recruitment of borrowers, and

support services. Information on the setting includes general socioeco-
nomic, political situations in India as a country, and in Tamil Nadu State.
(b) Literature on related topics: microfinance as a poverty alleviation strategy,
scaling up in general and specifically in the context of microfinance, chal-
lenges of scaling up, evidences and measures of mission drift.
(c) Quantitative data on all clients (census) from the time they join the program
until the time they leave the program. This data includes client name, caste,
household size, location (urban or rural), gender, housing index (poverty
level), household monthly income, the purpose of loans and size of loans
(information on the last four indicators is obtained each year to create a lon-
gitudinal database).
(d) Primary data on experiences and perceptions of clients, workers, manage-
ment, board, and representatives of funding agencies who have been a part of
ASA’s scaling-up process. As explained below, there were several different
techniques for collecting this primary data. With clients, a survey and FGD
techniques were used. The survey and the focus group discussions used a
stratified random sampling technique.
Plan and Methods of Data Collection

Data Collection Methods
The research questions are addressed through a case study approach.
Lacking a sufficient base of empirical research, the current mixed-method
study has extensive exploratory goals. The case study method lends itself to
this. According to Denzin and Lincoln (1998), this is an instrumental case
study because a particular case is examined to provide insight into an issue
or a particular phenomenon and for developing or refining a theory. The
choice of case is made because it is expected to advance our understanding
of that other interest. Because the case study examines the phenomenon at
only one site, the results are not generalizable; however, the theory-building
exploration may be used in subsequent studies (see case study role above).
The case study inquiry relies on multiple sources of evidence, with data
needing to converge in a triangulating fashion. As such, in the current study
a mixed method is used for data gathering to triangulate various data sources
recognizing that all methods have limitations and triangulation allows neu-
tralizing or canceling biases of other methods (Creswell 2003). Main features
of the methodology are: (a) use of multidimensional pre–post quantitative
data to show whether or not there is mission drift at ASA; (b) use of mixed
methods, some quantitative but mostly qualitative, to identify challenges that
lead to drift while scaling up and strategies that inhibit drift, based on whether
there is mission drift or not (and possibly for areas showing drift even if ASA
in general is not drifting); (c) use of purposive sampling to explore selected
themes of primary findings and better understand what is going on.
Use of mixed methods consists of surveys with 420 current and former
clients, 18 FGDs with 216 current and former clients, interviews with 3 front-
line staff, 4 board members, 3 representatives of funding agencies, and two
groups of management staff (20 in total). In addition, the key literature works
by others in the field and archival documents of ASA and the larger socioe-
conomic and political context in which ASA operates are reviewed. Details
on how the sample was selected are described below.
In addition, the research obtained and analyzed the quantitative data on all
clients recorded in the management information system (MIS) of ASA on
membership, portfolio, savings accounts, operational and financial self-
sufficiency, financing, and human resources. These were analyzed to deter-
mine the scaling-up results in various organizational aspects.
Another source of quantitative data came from an Excel-based database that
kept information on all new members at the time they entered the program. It
has been tracked over time since the inception of the program. Such data
included the poverty level of new members at entry according to the Housing
Index, household income per capita on a monthly basis, case status, geo-
graphic location, sector of microenterprise to be financed by the first loans,
and specific purpose of loans. Such multidimensional pre–post quantitative
data was used to show whether or not there is mission drift at ASA.1 The data
was close to 95% complete because each client’s information is required to
be entered into the database before they can be approved for and given the
loan. As mentioned above, this database had information on all clients. The
types of information included: client name, caste, household size, location
(urban or rural), gender, housing index (poverty level), household monthly
income, the purpose of loans, and size of loans (information on the last four
indicators is obtained each year to create a longitudinal database). A field
officer records this information from each client at the time he or she applies
to join the program. The completed form goes to the computer officer based
in each branch, who enters the information into the database. Data from all
branches are consolidated in the head office and updated over time.
Finally, documents and archival data are of importance for this research
because the written documents and records endure and thus give historical
insight because the information may differ from and may not be available in
spoken form, and because access can be easy and low cost (Denzin and
Lincoln 1998). Such source of information enables the researcher to obtain
the language and words of participants in historical context, can be accessed
Table 2
Completed Sample for the Survey
Type of Participant Pre-2001 Post-2001 Total
Current members 126 112 238

Former members 101 80 181
at a time convenient for the researcher (an unobtrusive source of informa-

tion), represents data that are thoughtful, in that participants have given atten-
tion in compiling, and as written evidence, it saves a researcher the time and
expense of transcribing (Creswell 2003).
In the current study, the researcher collected and analyzed the docu-
ments and archival records of ASA prior to and during the field research to
gain better understanding of the contextual and historical factors that might
have had a bearing on the scaling up and its implications on ASA’s poverty
alleviation mission. Types of documents included annual reports, reports
prepared by external evaluators; reports prepared by ASA for external agen-
cies; internal policy documents; e-mail discussions; and so on. In addition,
the researcher reviewed economic surveys, social development reports of
India as the country and Tamil Nadu as the state where ASA operates.
These were sought after to understand the macroeconomic and social fac-
tors that might have shaped ASA’s poverty alleviation mission at inception
and at the time of the research.
Sampling Strategy
As Table 2 shows, primary data was gathered from six categories of indi-
viduals: ASA current members, former members, FOs, management staff,
board members, and representatives of funding agencies. For conducting the
survey and FGDs, the sample of current and former members was randomly
selected. Next, the list was stratified into two subgroups: members who joined
ASA before 2001 and members who joined ASA after 2001. For each sub-
group, a total of 132 random numbers were generated. The target was to select
120 members from each subgroup. The sample was estimated with 10%
replacement. Members who matched the randomly generated numbers were
selected from the subgroup list. The plan was to select a member who was next
to the first sampled member in case the latter did not show up.
A third group of 190 former members was also obtained from a list of all
former members (those who dropped out of the program or those who no
Table 3
Completed Sample for the Focus Group
Discussions and Interviews
Instrument Type of Participant Pre-2001 Total
FGDs Current members 9 groups 108 (9 groups)

Former members 9 groups 108 (9 groups)
Management 20 20 (2 groups)
Interviews Field staff 3 3
Board members 4 4
Funders 3 3
Note: FGDs = focus group discussions.
longer have any savings or loans with ASA). This list was also first stratified
by the two subgroups: those who dropped out of ASA before 2001 and those
who dropped out after 2001. From each subgroup, 102 former members were
randomly selected for the survey (the target was to have 90 in each subgroup)
based on randomly generated numbers for each subgroup list. With this 10%
replacement, a total of 204 former members were selected (target was to sur-
vey 180 former members in total). Together, the total sample for the survey
was 468 (with the target surveying 420). Table 2 presents the completed sur-
vey responses.
In total, 126 pre-2001 current members, 112 post-2001 current members,
101 pre-2001 former members, and 80 post-2001 former members were
interviewed in person.
Additional information was gathered through the following individual
interviews and FGDs to elaborate the findings of the quantitative methods
based on a random sampling. Thus, for this exploratory data gathering, the
sample was selected purposively based on the primary findings and need for
more clarification. The objective was to select those who offered most inter-
esting stories and explanations for the primary findings. Care is taken to treat
the resulting information as exploratory and supplementary, rather than as a
source of new data. Table 3 presents the completed sample of this exploratory
data gathering.
A total of 18 FGDs were conducted with current and former members
who had joined ASA before the scaling up or before March 2001 (9 FGDs
with current members and 9 FGDs with former members). The reason for
selecting only pre-2001 members was because they were expected to have
more experience and knowledge about the scaling-up process and its effects
from members’ perspectives. On average, each group had 12 participants.

Participants were randomly selected from the list of current members and for-
mer members for participating in the FGDs. In total, 216 members partici-
pated in FGDs: 108 from each group.
Two group discussions were conducted with management staff at the head
office (20 staff). Information from the first group discussion was used to
design the FGD and interview schedules. The sampling strategy was to select
those individuals who had experience and knowledge about the scaling-up
process and the ability to provide insights comparing the topics of the study
before and after the scaling-up process.
Next, three individual interviews were conducted with field-level staff.
The field-level staff members were selected from the same branches in which
members were selected for the survey and FGD. The sampling was purpose-
ful in that the field staff members were selected based on their experience
before and during the scaling-up process.
Last, individual interviews were conducted with funders and board
members. First, the list of all funders and board members was obtained. Three
funders and four board members were selected and interviewed based on their
availability and willingness to provide information. The sample included those
who had an experience and knowledge about the scaling-up process and were
able to provide insights comparing the topics of study before and after 2001.
An effort was made to interview all funders and board members who were
available and willing to give interviews. Four board members of six were suc-
cessfully included.
Data Analysis
Data from the sources described in the preceding section is analyzed
according to the following methodology. Mission drift is determined by com-
puting the percentage changes and identifying the direction of changes. The
indicators in the first dimension depth of outreach determine whether ASA has
moved up the market and started serving more affluent people after scaling up.
The indicators in the second dimension quality of outreach measure whether
there was any change in the quality of service and the level of members’ sat-
isfaction with the services of ASA. Indicators in the third dimension scope of
outreach measure if there is any change in the number and type of services
offered by ASA due to scaling up. Then, an average percentage change is com-
puted based on the percentage changes of each individual indicator. After
computing the average percentage change at an organizational level, individ-
ual percentage changes are computed for the three branches selected for the
current study to represent rural, semi-urban, and urban branches of ASA. This
is expected to reveal whether there is any mission drift due to the branch
characteristics—whether urban branches experience more mission drift than
rural branches, or vice versa.
Second, two data sets of survey responses are created to identify changes
in the member profile that might have taken place during scaling up. These
data sets represent two types of new members: those who became new
members prior to scaling up (referred to as “Pre-2001”) and those who
became new members immediately after the scaling up (referred to as “Post-
2001”). Two hundred and ten members in each of these two groups were ran-
domly selected and interviewed in January 2004. To investigate possible
shifts in the member profile associated with the scaling-up processing, the
characteristics of the pre-2001 new entrants are compared with those of the
post-2001 new entrants on a set of household-, community-, and enterprise-
level socioeconomic and demographic indicators as well as their satisfaction
with quality and variety of services. Finally, former members are asked about
the primary reasons why they are no longer participating in the program and
their satisfaction before they stopped participating. The indicators are listed
in Table 4. The responses on these indicators from the two groups were
tested for statistically significant difference using independent sample t tests
and chi-square statistics, a nonparametric statistic for assessing the associa-
tion between categorical variables.
Finally, detailed notes from FGDs and interviews are used to explain
why certain areas experience or do not demonstrate mission drift and what
strategies have enabled ASA to maintain its mission while addressing the
challenges during the scaling-up process. The qualitative data is grouped by
the following subheadings: depth of outreach, scope of outreach, quality of
outreach, and strategies. In addition, the results from the review of archival
documents are integrated to add more details and verify the findings of qual-
itative data.
Table 5 shows the scenario under which mission drift will have taken effect,
with sample indicators of each dimension.
Findings on Mission Drift2
Findings on mission drift are grouped and reported in three dimensions:

(a) depth of outreach, (b) quality of outreach, and (c) scope of outreach. Each
section starts with the analysis of quantitative data on the overall organization
(comparative analysis on three branches is not included in this article) fol-
lowed by the analysis of selected survey indicators. The quantitative data is
drawn from MIS, the Excel-based quantitative database on all clients (as
described above), and a structured survey of 419 current and former members.
Table 4
Additional Indicators of Outreach
Indicators Definition
Socioeconomic profile
Gender Percentage of woman members
Age Average age of members
Civil status Percentage of members in each civil status
Education Percentage of members who has never gone to school
Income per capita Total household income of a member divided by the total number
(Rupees) of household members in rupees
Salary Percentage of members whose household receives at least one
full-time wage
Working child Percentage of children in member’s family working to earn income
Income per Income per working child in the family (in rupees)
child working
Housing Ownership status of member’s housing at the time of the survey
Housing index Condition of the housing owned by those who reported to have
own house (fewer than 4 points = poorest, 4–8 points = poor,
and more than 8 points = less poor)
Food security Percentage of members by food security scale that measures the
ability of members’ family to have sufficient amount of and
variety of food
Savings Percentage of members who has own voluntary savings besides
compulsory savings with ASA
Sector The sector of primary microenterprise financed by last loan
Program participation
Number of loans Number of loans taken since becoming a member
Loan size Average size of last loan in rupees
Loan term Average term of last loan in months
Use of loans Specific usages of last loans
Services received Percentage of members receiving each specific service at the time
of the survey
Other sources of service Percentage of members who have access to other sources of
services besides ASA
Satisfaction of
current members
Overall quality Percentage of members who rated the overall quality of services
of service as “good” or “excellent”
Member service Percentage of members who rated the quality of member services
as “good” or “excellent”
Variety of services Percentage of members who rated the variety of services as
“good” or “excellent”
Time spent with FO Average number of hours spent with FO per month, as indicated
by members
(continued)
Change in time Change in the number of hours spent with FO per month at the
spent with FO time of the survey compared with 3 years ago (prior to the
scaling up), as indicated by the pre-2001 members
Satisfaction of
former members
Decision to leave Proportion of former members who departed because of decisions
made by herself, her family, her group, or ASA management
Most important Proportion of former members who departed because of reasons
reasons for departure outside the program and business, or problems in her own
business, or did not need capital, or problems with borrowing
in a group, or reasons related to ASA
Reasons for ASA or Percentage of members who were expelled by her group or ASA
borrowing group management because of specific reasons
to expel a member
Specific reasons for Percentage of members who departed because of specific reasons
member to depart related to ASA and borrowing in a group
that were related to
ASA and borrowing
in group
Overall quality Percentage of former members who rated the overall quality of
of service services as “good” or “excellent”
Member service Percentage of former members who rated the quality of member
services as “good” or “excellent”
Variety of services Percentage of former members who rated the variety of services
as “good” or “excellent”
Most liked attribute Percentage of former members who liked specific attributes of ASA
Least liked attribute Percentage of former members who liked least specific attributes
of ASA
Things to improve Percentage of former members who suggested improvement of
specific attributes of ASA
Note: FO = field officer; ASA = Activists for Social Alternatives.
After the analysis of the quantitative data, additional analysis of qualitative

data is discussed to explain anomalies and provide context to the key findings.
This qualitative data is drawn from the individual interviews with the front-
line staff, board members, and funders. In addition, the data is drawn from
FGDs with current and former members and management staff members.
Summary of Mission Drift Findings

Overall, as measured by the established measures, ASA has experienced a
“minimal” mission drift as indicated by an index of .8 in Table 6 on mission
Table 5
General Case Scenarios for Mission Drift
(Pre = before March 2001, Post = after March 2001)
Sample Indicators Mission Drift Effect
Average size of loans Pre < Post

Proportion of poorest members at entry Pre < Post
Proportion of dalit members Pre > Post
Proportion of rural members Pre > Post
Caseload Pre < Post
Percentage of members who rated quality
of member service as “good” to “excellent” Pre > Post
Number of financial services Pre > Post
Table 6
Overall Indices of Mission Drift
Depth of Quality of Scope of Overall
Outreach Outreach Outreach Mission Drift
Activists for
Social Alternatives .7 1.8 0 .8
drift. In particular, a “minimal” drift (index of .7) or less than 25% change is
experienced in the direction as expected in the Proposition A—the depth of
outreach. As for the quality of outreach, close to “small” mission drift (index
of 1.8) or 26% to 50% change is experienced in the direction as expected in
the Proposition B. In terms of scope of outreach, there is no mission drift
(index of 0) that was assumed in the Proposition C. In other words, during the
scaling-up process ASA has minimally moved up to serve the better-off
market and compromised the quality of its services on a small scale; however,
it has not decreased the variety of services and products. Putting these in the
perspective that the highest mission drift is indicated by Index 5 and lowest
drift is Index 1; the findings reveal that although it is not possible to conclude
that ASA has not experienced any drift, the magnitude of the drift is minimal
because it is less than the lowest drift index. An index of .8 means less than
25% change in the directions suspected by the above propositions of mission
drift.
Table 7 presents the results of mission drift of all 16 indicators and the
average mission drift of ASA.
Table 7
Results of Activists for Social Alternatives Mission Drift
Pre-2001 Post-2001 % Change Drift Drift %
Average size of loans 1660 1517 –9 No –9

Household income 622 483 –22 No –22
Poorest (%) 12 10 –17 Yes 17
Poor (%) 88 90 2 No –2
Less poor (%) 0 0 0 No 0
Dalit (%) 100 100 0 No 0
Nondalit (%) 0 0 0 No 0
Rural members (%) 80 55 –31 Yes 31
Agricultural loans (%) 10 4 –60 Yes 60
Caseload 257 583 127 Yes 127
Time available 47 21 –55 Yes 55
per member service
Percentage of respondents 79 85 8 No –8
said overall quality of
service “excellent” or “good”
Percentage of respondents 71 83 17 No –17
said variety of products
and service “excellent”
or “good”
Percentage of respondents 81 75 –7 Yes 7
said FO quality of service
“excellent” or “good”
Number of financial services 2 4 100 No –100
Number of financial products 4 7 75 No –75
Average ASA mission drift 5 of 16 5
Note: FO = field officer.
Depth of Outreach
Analysis of historical data on all clients. ASA has experienced a “mini-
mal” mission drift in terms of depth of outreach (index of .7 on a 5-point
scale); that is, compared to the prescaling-up period, there is a minimal shift
or less than 25% change in the poverty level of ASA’s members at the time
they enter the program.
Table 8 illustrates that the most significant mission drift within this
domain has occurred due to decrease in the proportion of loans for agricul-
tural purposes (index of 3 indicating moderate level of drift). Prior to the
scaling up, 10% of the total portfolio was granted for agricultural purposes,
Table 8
Results of Mission Drift in Terms of Depth of Outreach
Drift Index No Drift Index
Agricultural loans 3 Average size of loans 0

Rural members 2 Household income 0
Poorest 1 Poor 0
Less poor 0
Dalit 0
Nondalit 0
whereas the loans for agricultural purposes accounted for only 4% imme-
diately after the scaling up. This is possibly due to the acute drought expe-
rienced throughout Tamil Nadu State during the past several years. The
discussion based on qualitative data that follows provides more insight on
this.
The second important drift has been experienced in ASA’s outreach to
rural members. The percentage of rural members has decreased from prescal-
ing-up level of 80% to 55% in March 2003. This is primarily due to opening
of new branches in urban and semi-urban settings. Although the absolute
number of rural members has increased, the proportion of them in the over-
all pool of members has decreased due to a relatively greater number of urban
members.
The last indicator in this domain that has experienced drift is the poverty
level of members. The proportion of members who were defined as “poorest”
according to the Housing Index has decreased from 12% to 10%. The poor-
est are defined as those having fewer than 4 points on a 16-point scale of hous-
ing index; that means they live in housing that is typically small, in a bad
condition, and is made out of mud for walls and thatch for the roof. Compared
to the prescaling-up period, the absolute number of new entrants with a hous-
ing index fewer than 4 points increased. However, their proportion in the pool
of all new entrants has decreased due to an even greater increase in the
number of new entrants who are defined as “poor” according to the Housing
Index. The poor are those who have 5 to 8 points on the 16-point scale of
housing index, which means they live in either a little bigger house or in a
little better condition, or the wall material is brick instead of mud, or the roof
is made of tiles instead of thatch. Those whose house is indexed for more than
8 points on the 16-point scale are defined as “less poor.” In ASA as a whole,
the number of less poor new entrants has not increased significantly. Thus, the
decrease in the proportion, not in the absolute number, of poorest new entrants
is primarily compensated by an increase in the number of poor new entrants.
The decrease in the poorest member piece of the pie was less than 25% and
thus is indexed as 1 on a 0- to 5-point scale or “minimal” drift.
There was no evidence of drift in the remaining six indicators of depth of
outreach. In particular, the general case scenario expected mission drift to
occur if there is an increase in the average loan size. However, the data from
MIS shows that there has been in fact a decrease in the average size of loans
(rupees [rp.] 1660 to rp. 1570 in real terms). The same is found in the aver-
age monthly household income per capita, which has decreased from rp. 622
to rp. 483 in real terms. These two pieces of evidence suggest that ASA is
serving more poor people than it used to. Furthermore, there is no evidence
of increase in the proportion of new members who belonged to nondalit
or forward castes, and the new members who were defined as “less poor”
according to the Housing Index at the time they joined the program. On the
other hand, the proportion of new entrants defined as poor at the time of entry
according to their housing index (falling in between 4 and 8 points) and the
proportion of new members who are dalit or belong to scheduled caste,
scheduled tribe, or backward caste has not decreased. Because ASA’s mission
is to serve the poor, especially dalits, these findings indicate no mission drift.
Overall, it can be concluded that although the overall index indicates a mini-
mal drift, the individual proxy indicators of depth of outreach show a mixed
pattern.
Analysis of Survey Data on Depth of Outreach

Demographic and socioeconomic profile. In addition to the entry-level data
of members, a structured survey was conducted with 420 randomly selected
current and former members, one half of whom were pre-2001 members and
one half were post-2001 members in the three branches selected. The survey
was intended to capture data on demographic and socioeconomic profile of
members, as well as their program profile or participation in the program.
Responses to these questions are analyzed to find out whether the members
who joined before and after the scaling up differ significantly. The results are
expected to answer Proposition A as previously outlined. Is ASA serving
better-off clients as a result of scaling up?
The analysis of the survey results demonstrates that in all but one indica-
tor there is no statistically significant difference at a 90% confidence level in
terms of the demographic and socioeconomic profile of respondents who
joined before and after the scaling up. As Table 9 illustrates, both groups
reported that they are on average in their 30s, all members are women, the
majority are married (pre-2001, 77.5% and post-2001, 78.2%,), have their
own house (pre-2001, 78.4% and post-2001, 68.9%), and eat enough quan-
tity but not enough variety of food (pre-2001, 68.7% and post-2001, 65.8). In
terms of income, post-2001 members reported a slightly higher household
income per capita than the pre-2001 members (rp. 574 vs. rp. 606, respec-
tively). However, according to the chi-square statistics, there is no significant
difference (2-tailed p value of .34). Average Housing Index, another indica-
tor of their socioeconomic status, shows no significant difference between the
two groups. On average, those who joined before and after the scaling up fall
under the category of “poorest” according to the Housing Index. Furthermore,
a relatively small percentage of both groups enjoy voluntary savings (pre-
2001, 24.7% and post-2002, 33.6%), and there is no significant difference
between them. Also, the majority in both groups have at least one wage
income. A small percentage of children in families within each group work
to earn income. The only significant difference is that in the family of
members who joined ASA after 2001 the child income per working child is
lower. This means the working children of post-2001 members are able to
earn less than the working children of pre-2001 members, on average.
Among the business sectors, trade was most important: 29.8% of the pre-
2001 members reported that they used their loans to finance their business in
trade, whereas 36.7% of post-2001 members invested in the same business
sector. Agriculture and manufacturing were reported to be the sectors in
which the respondents, before and after 2001, invested least (3.6% and 1.6%,
respectively, for agriculture, and 6.2% and 8%, respectively, for manufactur-
ing). The percentage of investment in crop agriculture has decreased for
members who joined after 2001, though it was not a significant difference
according to the chi-square statistics. This is due to droughts and limited rain-
fall during the past several years in Tamil Nadu. Overall, there is no statisti-
cally significant difference between the two groups with respect to the specific
sector of microenterprise financed by the members’ last loan (see Table 10).
Program participation. There is no significant difference between the two
groups in terms of the average loan term and usage of last loan, as demon-
strated in Table 11. Regardless of when they joined the program, the largest
percentage of respondents used their loans for buying more inputs or stocks
(37.2% and 33.5%, respectively), starting a new business or changed business
type (25.6% and 26.6%, respectively), and improving business site (10.3%
and 13.8%, respectively). Household or consumption accounted for relatively
small percentages of loan usage, the largest being construction and/or repair
of housing (11.7% and 8.5%, respectively).
Table 9
Demographic and Socioeconomic Profile
Indicators Pre-2001 (n = 126) Post-2001 (n = 112) p value
Socioeconomic profile
Gender (%) 100 100 NA
Age 35.2 34.9 .79
Civil status
Married (%) 77.5 78.2 .40
Separated and/or divorced (%) 8.8 11.4 .40
Widowed (%) 9.7 8.8 .40
Single and/or never married (%) 4.0 1.6 .40
Education
No school (%) 41.9 37.8 .61
Below fifth grade (%) 18.1 15.0 .61
Income per capita (rupee) 574 606 .38
Salary (% said yes) (%) 95.2 94.3 .83
Working children as percentage
of all children in family (%) 5.1 3.4 .34
Child income per working
child (rupee) 1085 603 .04*
Savings (% said yes) (%) 24.7 33.6 .19
Housing
Own house (%) 78.4 68.9 .07
Lease house (%) 1.8 3.1 .07
Rent house (%) 14.5 23.8 .07
Rent government quarter (%) .9 .0 .07
Colony (%) 4.4 4.1 .07
Housing index (own house):
range of scale is 0–16 4.8 4.4 .22
Food security
Enough quantity and variety
of food (%) 11.90 15 .62
Enough quantity, but not always
the variety of food (%) 68.7 65.8 .62
Sometimes not enough to eat (%) 18.9 19.2 .62
Often not enough to eat (%) .4 .0 .62
*Difference is statistically significant at p < .05 level.
The only two significant differences were found in terms of the number
of loans taken and the average amount of last loan. This is expected as the
pre-2001 members have been in the program longer and thus have gradu-
ated to more and larger loans, compared to the post-2001 members. Pre-
2001 members who have been in the program at least for 3 years at the
Table 10
Sectors of Microenterprises Financed by Last Loan
Activists for Social Alternatives
Pre-2001 (n = 126) (%) Post-2001 (n = 112) (%) p Value
Sector
Trade 29.8 36.7 .07
Animal raising 20.0 15.4 .07
Food and other service 14.2 16.5 .07
Manufacturing 6.2 8.0 .07
Crop agriculture 3.6 1.6 .07
Table 11
Program Participation
Pre-2001 Post-2001 p Value (Two-Tailed)
No. of loans taken 2.5 1.7 .00

Amount of last loan in rupees 6495 5256 .00
Last loan term in months 11.7 11.8 .36
Usage of loans .46
Buy more inputs or stocks (%) 37.20 33.50 .46
Start a new business or
changed business type (%) 25.60 26.60 .46
Construction and/or repair
of housing (%) 11.70 8.50 .46
Improved business site (%) 1.30 13.80 .46
Buy fixed asset, including
equipment, tools (%) 5.40 1.10 .46
Hire more workers (%) 3.10 1.10 .46
Pay rent allowance for the
business site (%) 2.70 2.10 .46
Paid off debts (%) 1.30 2.10 .46
Medical and/or funeral
expenses (%) 1.30 .50 .46
Paid school fees (%) .90 1.10 .46
Don’t know and/or invalid (%) .50 .60 .46
time of the research had received 2.5 loans on average with an amount of
rp. 6495 on average, whereas the post-2001 members had 1.7 loans with an
average amount of rp. 5256. These findings are the same when the branches
are compared.
Table 12
Access to Other Sources of Service
Pre-2001 (%) Post-2001 (%) p Value
Government self-help groups 10.50 5.80 .14

Other nongovernmental organizations 2.30 0.60 .24
Informal credit cooperatives 1.80 1.20 .69
Formal cooperatives 1.40 3.50 .19
Commercial banks 3.60 1.80 .36
Other 3.20 2.30 .76
No service from other sources 81 88 .06
Other than ASA, the respondents do not participate or receive services

from other possible sources. Table 12 demonstrates that 81% of pre-2001
members and 88% of post-2001 members said they did not receive services
from other sources. There is no statistically significant difference between
the two groups in terms of access to or participation in other sources of
service. Only 10.5% of pre-2001 members and 5.8% of post-2001 members
participate in government self-help groups. This shows that the members
who joined before and after 2001 are usually people who do not have access
to service from other sources. The findings are the same when the three
branches are compared. Namely, in all three branches, post-2001 members
to have less access to commercial banks, government self-help groups, and
other nongovernmental organizations (NGOs), which are considered less
costly options. Yet, with an exception of Chozhan Nagar, larger percentages
of post-2001 members reported they were receiving services from formal
cooperatives. However, as stated above, these differences were not statisti-
cally significant.
The above quantitative data (Excel-based, all-client data and survey) pre-
sents mixed messages as to whether or not ASA has moved up to serve
better-off people and abandoned the poorest. Essentially, the findings show
drift from the poorest in some areas and no drift in others. It is important to
understand the reasons behind some of these findings and gain more in-
depth knowledge to determine whether or not ASA has indeed drifted away
from the poorest. Qualitative data from the FGDs with members, individual
and group interviews with front-line staff, management, board members, and
representatives provide more insights into the above findings and are dis-
cussed below.
Is ASA moving up to serve better-off clients?

There is very little evidence of drifting away from the poorest, when mea-
sured by the Housing Index, the primary poverty targeting tool that has been
used by ASA since the start of its microfinance program. However, as the
number of new members has increased, proportionally the number of less
poor new members has increased. Prior to the scaling up, ASA had no
member who was defined as less poor according to the Housing Index. In
ASA’s total portfolio, the increase in the less poor new entrants is negligible.
As demonstrated by the analysis of quantitative data above, the percentage
of new members who are qualified as the “poorest” or the bottom half of the
poor has dropped from 28.6% to 21.5% of all new entrants.
Is this a significant abandonment of the poorest members? Board
members, front-line staff, and management staff claim that the demon-
strated decline in the percentage of the poorest members is primarily due to
the limitations and human errors associated with the measurement. The
above findings are based on the Housing Index, which has been used as the
primary proxy indicator at ASA to measure the poverty level of incoming
members. As ASA has expanded and opened new branches in urban set-
tings, the FOs find that even the poor in urban areas in general have better
housing than those who are poor in rural areas. However, the same house in
urban areas will be considered lowest quality compared to other houses in
urban areas. Basically, the Housing Index is limited because it is a measure
of relative, rather than absolute, poverty. It does not reliably and accurately
measure the poverty level of members at entry. Here are some quotes from
what the board members, management, and front-line staff stated during the
interviews:
We cannot determine poverty level by the housing index alone. Even though
some people living in poor houses can be better off than people living in
better housing. Thus, ASA uses other assets, nutrition, food and other things
in combination with housing index to determine poverty level.
In terms of the housing index, generally all people are improving their housing
condition, but still they are poor regardless of better materials used in the
house. Due to fire, many people are forced to change the roof from thatch to
tiled roof.
Also, the government of India started to provide free housing, referred to as

“colony” to the poor. Those who live in a colony house get a higher housing
index because the colony house is usually in a good condition and is con-
structed with materials that are assigned higher points on ASA’s Housing
Index. Because of the high points on the housing Index, they fall under the cat-
egory less poor and increase the proportion of less poor in the total portfolio,
even though they are defined as poor by the government and, thus, given a
colony house.
Besides these inaccuracies in using the Housing Index as a proxy for
poverty level, there are also human errors that affect the results. The chair-
man commented during the individual interview that even though the staff
are given intensive training on how to identify the poor using the Housing
Index and to record the data, there are incidences where the field-level staff
did not record the numbers accurately or made errors when entering them
into the computer-based database.
Even though the results of the Housing Index as a measure of poverty
level indicate minimal drift from the poorest toward the less poor, the inter-
views also revealed a strong and consistent commitment to continue focus-
ing on the poorest from stakeholders at all levels: from members to
front-line staff, management, board members, and representatives of fund-
ing agencies. They all stated that ASA continues its commitment to serve
the poorest. Here are samples of what they had to say about ASA:
A board member said:
Originally ASA was focusing on the poorest of the poor women which means
below the poverty line (not able to have even one meal a day). I believe ASA
will not move away from the target—the poorest because the other better off
people have other, better options like borrowing from commercial banks or
government banks which offer much better interest and terms. So, only the
poorest will go to NGOs like ASA since they are the only ones without access
to such better options. There are so many financial companies which offer
loans for any purposes which are accessible to better off people.
A representative of a funding agency said:
It is difficult for ASA to change the target and move up-market because the
middle and higher class can access other sources of financing at a lower cost,
they would not want to come to ASA since ASA is charging higher interest
rate [than the financial institutions]. Only the poorest people who cannot
access other commercial sources come to ASA.
It was clear from their responses that all stakeholders believed that ASA
would not change its mission because the poor are their niche market.
Table 13
Average Size of Loans by Branches (In rupees real term)
2001 2002 2003
Manapparai 988 1138 1593

Chozhan Nagar 1368 1560 2175
PK-1 971 1080 1660
Why did the average loan size decrease

in ASA as a whole but increased in branches?
There was really no clear explanation on why the average loan size
decreased in ASA’s total portfolio, whereas it increased in the individual port-
folio of branches. The data from MIS shows that before the scaling up the
average loan size was rp. 988 (in real terms using 1986-1987 as a base year)
in Manapparai branch and increased rp. 1138 in 2001-2002 and, then, to
rp. 1593 in 2002-2003. Likewise, as Table 13 shows, the average loan size
increased in the other two branches.
Is it a sign of mission drift? The answer is not a simple one. The average
loan size has not increased when the total portfolio of ASA is taken as a
whole. There were two changes in the size of the loans that occurred during
these periods. ASA increased the size of first loans from rp. 2000 to rp. 3000
before the scaling up because of demand from members and reduced the
maximum loan size from rp. 15,000 to rp. 10,000. According to the manage-
ment and chairman, ASA reduced the maximum loan size because they felt
members’ business capacity to absorb loans diminished because of droughts
during the past several years throughout Tamil Nadu. Because most members
are dependent on agriculture as a source of their living, they were affected by
drought and its consequences.
One of the possible reasons that the respondents indicated was that the
average loan size reduced in the total portfolio of ASA because of this cut
in the maximum loan size and the increase in the portfolio of branches is
because of greater number of first loans disbursed in those branches com-
pared to maximum loans. Because these branches are relatively new (1–3
years), they might have had a surge of new members and benefited from
ASA’s decision to increase the size of first loans from rp. 2000 to rp. 3000.
The question of whether or not this increase of average loan size in the three
selected branches is an indication of mission drift is not answered. When
the average loan sizes are compared to the GDP per capita, in each of the
corresponding year, the branches had not disbursed loans, on average, that
exceeded the GDP per capita. This indicates that there is no significant
mission drift when measured by the average loan size. During the group
interview, the management groups confirmed by saying, “from the man-
agement perspective, there is no compromise to shift—no intentional shift.”
Why is there an increase in the nondalit members?

A second indicator that has limitation is caste. There are basically two
main groups: dalit and nondalit. Dalits are the ones who are considered
most deprived and least advantaged. Since its inception, ASA has strived to
work for the dalit’s empowerment. Therefore, dalit that includes scheduled
caste, scheduled tribe, and backward caste people, is used as an indicator of
ASA’s mission drift. People who belong to these castes are considered
untouchables and are most oppressed.
According to the quantitative data discussed earlier, there is no decrease in
the proportion of dalit members. However, there is a minimal increase in the
number of nondalit members in one of the branches that were selected for the
study. Possible reasons behind this finding were questioned during the indi-
vidual and group interviews with the management, front-line staff, board
members, and representative agencies. The management group responded
that one of the possible reasons for an inclusion of nondalit members in PK-
1 branch is that there is a lower concentration of dalits in urban areas; and for
market penetration, urban branches may be accepting nondalit members if
they meet the eligibility requirements. One of the board members confirmed
this response that dalit people usually account for the relatively small per-
centage of the total population in a given village or location. She said, “In
many villages the proportion of dalit people is always a small percentage in
the village.” Another board member said:
Depending on the area, the composition of dalits and non-dalits in a particu-

lar community is different: some having more dalit and some having more
non-dalits or in some there is hardly any dalit. ASA gives priority to cover
the dalits in the area first and then serves the most vulnerable non-dalits.
Furthermore, the interviewees cautioned that using dalit as a proxy for the
poverty level of members has some limitations. During the recent decades
there have been many changes in the caste system throughout India. Many
people have changed their family names that used to be an indication of their
caste and have adapted names that do not specify their caste. Also, many
people have converted into religions that do not follow caste systems such as
Christianity and Islam. Furthermore, there is no definition which caste is dalit
and which caste is nondalit. Some people would say backward caste is dalit,
whereas others might say it belongs to nondalit. Therefore, the findings based
on the caste data may have inaccuracy in telling whether or not there has been
a shift in the poverty level of new entrants.
Why has the proportion of rural members decreased relative to the

proportion of urban members?
The number of branches in urban areas has increased; and thus, the number
of urban members has increased, reducing the proportion of rural members in
the overall pool. Does it indicate abandonment of rural members? Data from
the member database shows that the number of rural members increased from
5,374 in 2001 to 30,688 in 2003. It is almost a 5-fold increase during a 2-year
period. However, the growth of urban and semi-urban members was even
more rapid: Urban members increased from 762 to 12,213, whereas semi-
urban members increased from 574 to 12,897. This rapid growth is partly
explained by the fact that ASA believes there is still a great unmet demand and
a large number of poor people in urban areas, especially in slums. During the
group interview, the management staff commented, “these poor people also
need help to get out of poverty and we have to help them.” ASA is still care-
ful in identifying the poorest in urban areas. They are using additional screen-
ing indicators to identify the urban poor that reflect the unique features of
urban areas, such as occupation and family income. Those who are in demean-
ing, seasonal, and/or low-income earning occupations—such as construction
workers, daily wage earners, and sweepers—are most likely to be poor.
Besides the fact that ASA saw an unmet demand in urban areas, there
was also an incentive to locate the branches in more densely populated
areas, as described by one of the board members:
It is true that in urban area people have more opportunities for income gen-
erating activities, whereas in rural areas people are mostly relying on agri-
culture and are not willing to take loans because they will not be able to pay
back. However, this was not the main reason why ASA opened branches in
urban areas. The reasons for identifying location for new branches were:
areas where the survey shows dalit and poor people are living and the areas
that are densely populated.
Urban areas where ASA opened new branches have larger markets in the
sense that there is a greater concentration of poor people. The branches are
serving not only the market in the immediate location but also the poor from
neighboring villages. ASA management, board members, and front-line staff
feel that opening more urban branches does not mean an abandonment of
rural people who need ASA’s services. In the State of Tamil Nadu urban
poverty was growing at a faster pace than rural poverty. Almost 25% of urban
people in Tamil Nadu are said to be staying in slums that keep growing at
about 4.5% per annum (Tamil Nadu People’s Forum for Social Development
2001). This seems to indicate that there is growing poverty in the urban areas,
and the poor in those areas also need microfinance services.
Why have loans for agricultural purposes declined?

One of the proxies used to detect whether or not ASA is moving away
from its poverty alleviation mission was the proportion of loans disbursed for
agricultural purposes. The reason behind that was usually that those who rely
on agriculture for a living tend to be poorer because it is one of the income-
generating activities that is dependent on natural factors. The data from MIS
indicated above that the proportion of loans given for agricultural purposes
decreased from 5.03% before scaling up to 4.25% after scaling up. It was
clear from the interviews with management that it was a decision from man-
agement to give less priority to loans for agricultural purposes. The primary
reason was the drought that caused a decline in the capacity of members’
businesses in agriculture and related sectors. One of the board members
emphasized the effect of drought in agriculture-related income-generating
activities as follows: “Due to drought and lack of wells, there are less income-
generating possibilities in agriculture, so the members’ capacity to utilize
loans for agriculture has reduced.”
Management staff commented that poor people usually do not have wet
land, only dry land. Therefore, harvesting is dependent on rainfall.
Summary
The analyses of objective data drawn from the MIS and the structured sur-
vey indicate no significant drift in terms of depth of outreach. In other words,
ASA has not moved up the market and left the poor behind. There were only
three areas of the nine in which the proxy indicators showed some drift.
Those were a decrease in the proportion of loans given for agricultural pur-
poses, increase in the proportion of urban members, and decrease in the
proportion of members who were defined as the poorest according to the
Housing Index. Additional analyses of qualitative data revealed that
these results were primarily due to the limitations of the measurement. Also,
the reduced priority for agricultural loans was due to droughts that occurred
during the past several years in many villages where ASA operated.
The study has used location as one of the indicators of poverty level.
Generally speaking, poverty is higher in rural areas than in urban areas.
However, the definition of what is rural and what is urban is a tough one. In
Tamil Nadu, village and town panchayats with fewer than 25,000 people
are considered rural, whereas municipalities with 25,000 to 50,000 people
are semi-urban, and metropolitan corporations with more than 50,000
people are considered urban. Some of the newer branches that ASA has
opened are located in urban and semi-urban areas because of the density
that provides a larger market. Nevertheless, these branches serve not only
the people in the metropolitan corporations and in municipalities where
they are located but also people from nearby village and town panchayats.
Looking at the findings, the increase in the number of nondalit people
was minimal and only in one branch. Based on what the various stakehold-
ers said about the dalit situation, that minimal increase is attributable to the
two factors they identified: inaccuracy of the proxy due to changes in the
dalit system and a relatively small proportion of dalit population in a par-
ticular community.
To complement the weaknesses of the poverty measures, ASA started using
other indicators, such as whether or not an applicant is listed in the BPL pro-
duced by the state government and whether or not an applicant is qualified to
receive subsidies provided by the state government for the poor, as indicated
in his or her ration card. However, there was no record of these additional indi-
cators on an individual member basis. Front-line staff members are given
guidelines during their training to use these additional screening criteria but
are not asked to record them. Therefore, the current study uses housing index,
caste, and location as indicators of poverty despite their limitations.
It was consistently reported from all levels of stakeholders that there was
no intentional strategy or decision to move up the market and leave the poor
behind. Any shift that was found in the data happened either unintentionally
or because of inaccuracy of measurement proxies. They strongly believe ASA
maintains the mission. When the results of preliminary analyses on the depth
of outreach were presented to the management and the board, their reaction
was that they were not aware of some of the findings that indicated mission
drift. For instance, the findings that came as a surprise to them were the fact
that the number of nondalit members has increased in one of the branches,
the proportion of new members who were considered less poor because of
higher housing index points, and the average loan size had increased in the
three branches selected for the current study, in ASA’s total portfolio.
The responses from various stakeholders during the interviews were
consistent with the results of the additional analyses of survey data; that is,
both sources indicated that ASA did not drift from its poverty alleviation
mission to serve the poorest. The survey data showed no significant differ-
ence between the members who joined before and after the scaling up in
terms of their socioeconomic profile, program participation, and access to
other sources of service. On average, those who joined before and after the
scaling up fell under the category of “poorest” according to the Housing
Index. The only significant difference is that in the family of members who
joined ASA after 2001 the child income per working child is lower. This
means the working children of post-2001 members are able to earn less
than the working children of pre-2001 members, on average. In terms of
program participation, those who joined after scaling up had fewer loans
and a lower amount of loan during the last cycle prior to the research. This
is expected because those members who joined after scaling up had a
shorter time in the program than those who joined before scaling up. There
was no difference in the average term of their last loans. The majority of
members who joined before and after the scaling up did not have access to
other sources of services.
Overall, the findings from three different sources indicate that there is no
significant evidence of mission drift due to scaling up in terms of depth of
outreach. The next section examines the findings of these sources of data
on whether or not ASA compromised the quality of its services during the
scaling-up process.
Quality of Outreach
In this section, data from three sources are used to examine Proposition B
as formulated in the beginning of the article, which reads: “When organiza-
tions scale up, there is a tendency to require a field officer (FO) to handle a
larger number of clients to reduce transactional cost. Such an increased case-
load may lead to fewer hours spent with each client and, thus, lower quality,
less personal attention to each individual client, and decreased client satis-
faction leading to clients’ desertion (exiting the program).”
The quality of outreach is determined by five indicators: (a) the level of
members’ overall satisfaction with the organization, (b) the average number
of hours available for working with each member, (c) caseload (the number
of members per FO), (d) the quality of member service (e.g., personal atten-
tion, business counseling, help with family-related social issues, etc.) as
perceived by members, and (e) the percentage of former members who left
the program because of reasons related to ASA’s scaling up. As a poverty
Table 14
Overall Findings of Mission Drift in Terms
of Quality of Outreach
Activists for Social Alternatives
Caseload 5
Time available per member service 3
Percentage of respondents said overall quality of
service “excellent” or “good” 0
Percentage of respondents said variety of products
and service “excellent” or “good” 0
Percentage of respondents said field officer quality
of service “excellent” or “good” 1
Quality of outreach 1.8
alleviation mission–driven organization, ASA emphasized the importance

of high-quality service for the poor, especially in terms of spending time
with each member, providing business and personal advice, helping them
network with each other, giving information on nutrition, health, education,
gender issues, market prices and access to public services, among others.
When organizations scale up, there is a tendency to require a larger number
of clients handled by a field officer to reduce transactional cost. Such an
increased caseload may lead to fewer number of hours spent with each
client and, thus, lower quality service and member satisfaction. Furthermore,
dissatisfaction may lead to member desertion. Therefore, it is important to
understand whether since scaling up ASA has been able to maintain the
same quality service and the level of personal attention they used to provide
when the organization was smaller. Also, of importance is whether members
left the program because of reasons related to ASA’s scaling up.
Overall Findings of Mission Drift in Terms

of Quality of Outreach
Table 6 illustrates that ASA has experienced the largest mission drift in
terms of quality of outreach. Within this dimension, the most significant
mission drift has occurred in terms of increased caseload (index of 5) fol-
lowed by the time available per member service (index of 3), as shown in
Table 14. However, the survey responses indicate that about one half of the
pre-2001 members who were interviewed said that they were spending about
the same time with FOs at the time of the interview compared to 3 years ago.
Table 15
Survey Responses on Quality of Services
Pre-2001 Post-2001
Good to excellent 3 years ago (%) Currently (%) Currently (%) p Value
Quality of member service 81.4 75.4 89.8 .00

Variety of services and products 71.9 83.3 93.8 .04
Overall satisfaction 78.6 84.9 83.8 .08
Only 12% of them perceived that they spend less time now. This is the
same when responses are compared by the three branches. When they
were asked to specify the number of hours, they indicated on average they
used to spend 3.4 hrs per week with a field officer 3 years ago, whereas
now they spend 2.96 hrs. Post-2001 members said they spend 2.84 hrs on
average. According to the survey responses, there was no statistically sig-
nificant difference or reduction in the average number of hours spent before
and after the scaling up.
Within this dimension, the only other variable that indicates mission drift
is the drop in the percentage of respondents who rated the quality of member
service provided by the FO as either “excellent” or “good.” This is shown by
the results of the survey, as in Table 15. There is a drop in the percentage of
pre-2001 members who rated the quality of member services now as “good
to excellent” compared to 3 years ago. However, the drop is small: from
81.4% to 75.4%. On the other hand, there is an improvement in the percent-
age of responses rating overall satisfaction and the variety of services and
products as “good to excellent”: Whereas 78.6% of the pre-2001 members
rated the overall quality of service three years ago as “good to excellent,”
84.9% said the same about the current quality of service; 71.9% of them gave
the same rating on the variety of services three ago, whereas in the rating of
current variety of services the percentage has gone up to 83.3%.
Another interesting result in this table is that post-2001 members rated
the quality of member services and variety of services and products signif-
icantly higher than the pre-2001 members. In other words, a significantly
larger percentage of members who joined ASA after the scaling up are sat-
isfied with the quality of member services and the variety of services and
products offered by ASA, compared to those who had joined ASA before
the scaling up. This finding will be further explored below using the notes
from interviews and FGDs with members and front-line staff.
Table 16
Decision to Leave the Program
Pre-2001 (%) Post-2001 (%) p Value
Member herself 86.9 84.2 .71

Member’s family 10.7 14.5 .71
Member’s group 1.2 1.3 .71
Activists for Social Alternatives 1.2 .0 .71
Reasons for former members’ departure. One of the proposed indicators

for measuring mission drift in terms of quality of outreach was the percent-
age of members who left because of reasons related to ASA’s scaling-up
process. To understand various reasons why some members left the program,
a number of indicators were developed, and a set of questions on those indi-
cators were asked from former members through a structured survey. In total,
180 former members were interviewed, one half of whom were members
who had joined ASA before the scaling up and one half had joined after the
scaling up.
The analysis of the survey reveals that there is no significant difference
between the former members who had joined before and after the scaling up
in terms of the reasons why they left the program. As Table 16 demonstrates,
the majority of former members, before and after the scaling up, decided
themselves to leave. None of the post-2001 former members was expelled by
ASA management, whereas only 1.2% of pre-2001 former members left
because ASA expelled them. This is the same when each branch is analyzed
separately.
There was no significant difference in terms of the most important rea-
sons for pre-2001 and post-2001 members to leave. The most significant,
single important reason for pre-2001 members to leave was a reason out-
side of the program and her business (34.5%), whereas for the post-2001
members the most important reason was problems related to their busi-
nesses (42.3%). Table 17 illustrates that these reasons were the dominant
reasons for both groups to leave. ASA-related reasons and problems related
to borrowing in a group accounted for a very small percentage. Overall, the
pre-2001 and post-2001 members left the program because of the same set
of reasons: problems in their business or reasons external to the program
and their businesses.
Of those who left because they were expelled by either ASA manage-
ment or by the borrowing group, most had repayment problems (15% for
Table 17
Most Important Reason for Leaving
Pre-2001 (%) Post-2001 (%) p Value
Reasons outside the program and my business 35.4 36.6 .42

Problems in own business 30.4 42.3 .42
Don’t need capital now 13.9 9.9 .42
Problems with borrowing in group 7.6 4.2 .42
Activists for Social Alternatives–related reasons 12.7 7.0 .42
Table 18
Reasons for Activists for Social Alternatives (ASA) and
Borrowing Group to Expel Members
Pre-2001 (%) Post-2001 (%) p Value
Change in ASA’s loan policy due to its recent

expansion strategy .0 .0 NA
Difficulties with the field officer of ASA .0 .0 NA
Repayment problems 15.0 28.6 .58
Attendance problems 5.0 14.3 .46
Difficulties with group policies and procedures 5.0 28.6 .16
Difficulties with other members of the group 5.0 28.6 .16
pre-2001 and 28.6% for post-2001). Table 18 demonstrates that the only
difference that post-2001 former members reported was that some of them
had problems in following the requirements to attend the regular weekly
meetings, or had difficulties with other group members or with group poli-
cies and procedures. There was no statistically significant difference in the
responses from the two comparison groups. None was expelled because of
change in ASA’s loan policy as a result of scaling up or difficulties with
ASA FOs.
Former members were asked whether a set of specific reasons related to
ASA apply to their departure. Table 19 illustrates that except for three rea-
sons, none of the reasons applied to them. A little more than 10% of the pre-
2001 members and 6.7% of the post-2001 members said that one of their
reasons for leaving was because of stricter eligibility requirements to get a
loan. Furthermore, 10.3% of pre-2001 former members said they left
because processes to get a loan had changed, and 7.1% said they were not
Table 19
Activists for Social Alternatives (ASA)–Related
Reasons for Leaving
Pre-2001 (%) Post-2001 (%) p Value
Eligibility requirements have become stricter 10.3 6.7 1.00

No longer able to get personal attention from
field officers 7.1 .0 .15
No longer able to get info on products and
services .0 .0 NA
Processes to get a loan has changed 10.3 .0 .54
I was transferred to another branch and did
not like the treatment of field officer (FO)
in new branch. .0 .0 NA
ASA no longer provides developmental
services. .0 .0 NA
Less access and participation in decisions
regarding ASA’s policy and procedures .0 .0 NA
Had personal conflicts with the FO .0 .0 NA
longer able to get personal attention from FOs. These were not reasons why
post-2001 members left.
When former members were asked specifically about the quality of
services they received before they left the program, a significant majority of
them rated the quality of member services, variety of products and services,
and the overall quality as “good to excellent.” As demonstrated in Table 20,
there was no statistically significant difference between the pre-2001 and
post-2001 former members.
Pre- and post-2001 former members indicated “lower interest rate” as the
most liked attribute of the program (48.8% and 57.8%, respectively). This
was reported by a larger percentage of post-2001 members. However, the
difference was not statistically significant.
The next most liked attribute was “simple procedures and application.”
The least liked attributes were repayment schedule and fees (application
and processing fees). A negligible percentage of both groups pointed to
“changes in ASA policy” as the least liked attribute (1.4% and 2%, respec-
tively). Again, there was no statistically significant difference between the
two groups. In terms of attributes that need to be further improved, most
suggested lower interest rates and larger loan sizes (initial and subsequent
loans). No significant response indicated improvement on attributes related
to scaling-up process.
Table 20
Quality of Services Before Leaving: Former Members
Pre-2001 (%) Post-2001 (%) p Value
Good to excellent
Quality of member service received
from field officer (FO) 84.5 92.0 .33
Variety of products and services 86.9 86.7 .79
Overall satisfaction 88.1 90.7 .58
Most liked attributes
Lower interest rate 48.8 57.8 .14
Simple procedures and application 34.5 14.7 .14
Group support and help 3.6 9.3 .14
Convenience of loan disbursement 3.6 6.7 .14
Networking of women to address
infrastructure issues 2.4 1.3 .14
Mutual guarantee system 2.4 1.3 .14
Compulsory savings 1.2 5.3 .14
Larger circle of customers and suppliers 1.2 2.7 .14
Steady source of working capital 1.2 1.3 .14
In the following Table 21 are the results of the former members’ responses
on attributes they liked least or disliked and elements they would like to see
improved in ASA. The survey responses indicate that a significantly larger
percentage of post-2001 former members disliked the repayment schedule,
high processing fee, and small loan size. In terms of attributes to improve,
there is no significant difference between the responses of pre-2001 and post-
2001 members. The majority of them suggested lowering the interest rate and
increasing the size of initial loans, both of which had been already undertaken
right before the research.
Why has the caseload increased and time for member service
reduced? Does it affect members’ satisfaction with ASA?
As presented above, the area in which ASA experienced most drift in qual-
ity of outreach is the increased caseload. Namely, the number of members per
FO almost doubled during the 2-year period: from 257 in March 2001 to 451
in March 2003. This resulted in reduced time available per member: from 47
mins available per member per month in March 2001 to 27 mins in March
2003. As explained above, available time is calculated by dividing the total
working hours per FO (8 hrs per day and 6 working days per week). These
Table 21
Least Liked Attributes and Improvement: Former Members
Pre-2001 (%) Post-2001 (%) p Value
Least liked attributes

Repayment schedule 21.4 40.0 .05*
High application fee 18.6 10.0 .05*
High processing fees 5.7 16 .05*
Group guarantee and/or paying 11.4 6 .05*
for delinquent
Compulsory savings 7.1 8 .05*
Weekly group meetings 4.3 2 .05*
Loan size is too small 2.9 8 .05*
Changes in Activists for Social 1.4 2 .05*
Alternatives (ASA) policy
Things to improve
Lower interest rate 65.8 71.0 .62
Larger size of initial loans 13.2 8.1 .62
Larger size of subsequent loans 3.9 6.5 .62
Longer grace period 2.6 4.8 .62
Help solving problems with 2.6 .0 .62
other group members
Shorter meetings 1.3 1.6 .62
Longer loan term 1.3 1.6 .62
Better member service from 1.3 .0 .62
field officers
Less frequent meetings .0 1.6 .62
Lower training fee .0 1.6 .62
*Difference is statistically significant at p < .05 level.
are the two areas in which ASA demonstrated most drift due to the scaling-
up process.
To gain more in-depth understanding of how these changes have affected,
if at all, the quality of outreach as measured through members’ satisfaction, a
total of nine FGDs were conducted with current members who joined ASA
before the scaling up and are still members. The rationale for selecting only
pre-2001 current members was that they were assumed to be knowledgeable
about the before and after scaling-up program details. On average, there were
12 participants, resulting in about 108 participants. Here, some of the partic-
ipants’ responses related to these two changes and changes in their satis-
faction are presented. Because in the FGDs, responses were not recorded
individually but rather the majority’s opinion is recorded as a group response,
the findings are presented in terms of number of groups that had mentioned
the particular response.
Participants in seven of nine FGDs indicated that they were happy with the
fact that the FOs started to come only fortnightly to the center meetings
instead of weekly. One of the reasons for that was the scaling down of FOs’
involvement made them feel to grow more responsible and take control over
their resources. However, participants in four FGDs cautioned if FOs did not
visit the centers frequently they might lose control over the members.
Of the nine FGDs with current members, participants in seven groups
said they were satisfied with the individual attention from FOs before and
after the scaling up. They reported that before and after the scaling up the
FOs are still providing personal care, guidelines, and clarifying any ques-
tions the members may have. On the other hand, participants in three groups
mentioned that they did not like the fact that the FOs’ attention had reduced.
Participants in three groups indicated that FOs had to handle more members
per day postscaling up, and they did not like the increased caseload because
that reduced the FOs attention to members.
However, six of nine groups reported that after the scaling-up period they
were still getting the same information as they used to before the scaling up,
such as on new products and center meeting procedures, government wel-
fare schemes, and other additional information. Also, six groups indicated
that they were satisfied with the maintenance of records such as the copy of
denomination slips, collection format copy, attendance note, and minutes of
the center meetings. Compared to the prescaling-up period, the FOs were
still maintaining the records properly and more efficiently in the postscaling-
up period.
The participants also felt happy with FOs because the FOs remained
unbiased and flexible in their approach to members. There was no notice-
able change in the FOs’ attitude due to the scaling-up process that affected
members’ satisfaction. One of the interesting findings is that members have
mixed reaction to the frequent changes of FOs, which was noted by the man-
agement and board members as a big challenge. Participants in four groups
mentioned that staff changes did not have much impact, whereas three groups
indicated dissatisfaction. The latter groups claimed that frequent staff changes
negatively affect the quality of relationships members build with the FOs. It
takes time for new FOs to become knowledgeable about members and their
businesses as well as social background.
The management, board members, and front-line staff agreed that the
caseload increased and the service time per member decreased. However,
they did not think that these changes negatively affected the quality of
services overall and specifically, the member service. The stakeholders in

all these three levels strongly believed that even though the number of
members per FO increased ASA had undertaken a number of measures to
lessen the actual responsibilities of the FOs by improving efficiency and
hiring leading members to become community field officers (CFOs) and
replace the FOs in more mature centers.
One of the ways they said ASA improved efficiency was transferring the
manual recording of transactions to computerized recording. Previously,
FOs used to record all the loans and savings collections by hand on paper
forms and, then, consolidate them again in the branch to report to the head
office. Now, the transactions are easily entered into a computerized data-
base and are consolidated without any additional work. Also, at the center
level, the loans and savings collections used to be given by each member to
the center leader during the weekly meeting, who then records the amounts
in members’ passbooks and submits to the FO. There are approximately 20
to 40 members in each center, and counting everyone’s loan repayment and
deposits used to take up significant time. Now, the members are expected
to give their loan repayments and savings deposits to their group leaders
prior to the meeting. During the meeting, the group leaders (four to eight of
them) submit their group payments to their center leaders. This streamlined
procedure allowed shortening the duration of the center meetings.
Moreover, the board members and management thought the FOs’ capac-
ity was not fully utilized with the prescaling-up level. Thus, the postscaling-
up caseload is the right level. In the words of one of the board members:
Previously field officers used to have too much time sitting freely doing
nothing. Now the caseload has increased up to the right level where the
field officers are fully utilized. So, it is not affecting the quality of work.
By squeezing out inefficiencies they are creating time to manage an increas-
ing caseload.
Why did the pre-2001 members’ satisfaction with the

quality of member service decline?
As discussed above, majority of the pre-2001 current members who par-
ticipated in the FGDs indicated satisfaction with the FOs before and after the
scaling up. However, there were a few groups that expressed dissatisfaction
with the fact that FOs are frequently transferred between the branches (three
groups mentioned the FOs are transferred every 6 months). They felt the new
FOs did not know much about their businesses and their experience with
ASA. Because they believe they belong to ASA as part of their family, the
personal relationship is very important to them. The previous FOs who

worked with them from the beginning know them, and the members feel
comfortable talking to their previous FOs. Over time, they had become like
one family. FOs were also like counselors for them. Now, the new FOs do
not know much about the members; and thus, the members cannot trust them
immediately. Furthermore, six of nine groups suggested that it would be
better if the FOs continued to come every week instead of coming fort-
nightly. The members felt that even though in the alternate weeks that FOs
do not come, center leaders or the CFOs replace them, there is a difference.
Moreover, four of nine groups mentioned that because of increased caseload
FOs are not able to spend time with the members as much as they used to,
and thus, the FOs’ attention had decreased. They approximated that the FOs
used to spend 45 mins to 1 hr per week with members before the scaling up,
whereas now, they spend about 30 mins per week. This estimate is based on
the average time a FO spends each week in each center.
It can be speculated from the qualitative data at pre-2001 current
members’ satisfaction declined because of three main changes that took
place during the scaling-up period: (a) increased caseload for FOs, which led
to less time available to spend with members and pay attention to them; (b)
frequent changes or transfers of FOs between branches; and (c) changing
FOs’ visits to center meetings from weekly to fortnightly visits. However, it
must be noted here that the decline in the pre-2001 current members’ satis-
faction with the quality of member services was very minimal; that is, the
survey results indicated that 81.4% of the pre-2001 current members rated
the quality of member services 3 years ago (i.e., before the scaling up) as
“good to excellent,” whereas 75.4% of them rated the quality of member
services at the time of the research as “good to excellent.” This means, 6%
of the respondents rated current member services lower. It was not proven to
be a statistically significant difference.
Why did post-2001 members rate overall quality of services, quality of

member services, and the variety of services higher than pre-2001
members?
Post-2001 current members were not sampled for the FGDs because they
joined after the scaling-up period and, thus, were not knowledgeable about the
members prior to the scaling up. Therefore, there is no data from FGDs on
post-2001 members’ opinion about why they might have rated the overall
quality of services, quality of member services, and the variety of services
higher than the pre-2001 members. However, data from other sources, such as
the review of archival documents and interviews with the management and
front-line staff indicate a number of changes that took effect after scaling up
in the scope of the outreach, namely the number and type of services as well
as the terms and conditions of those services. It is assumed that those changes
might have influenced the post-2001 members’ level satisfaction. Those
changes are discussed in detail in the next section on the findings of scope of
outreach. To learn how the changes in the products and services are received
by members, ASA started to put in place a comprehensive client assessment
and monitoring system. The main objective is to institutionalize a system to
constantly get feedback from members and respond to their suggestions to
ensure continued high quality of outreach.
Another possible reason is that ASA promoted CFOs only in the more
mature centers to replace the FOs, which means in the centers that were
formed after the scaling-up period the FOs were still visiting every week and
working closely with the new members. A center must have been formed at
least 2 years ago for it to qualify for the change—“CFO replacing the FO in
alternative weeks.” The assumption is that the post-2001 members rated the
quality of services higher because they are still following the prescaling-up
model, in which the FOs come to facilitate the center meetings every week
and work closely with the members. This is only assumption and needs to
be further investigated to establish any credible relationship.
Summary
Quantitative and qualitative data indicate that the caseload did increase
significantly, and this increase in the caseload did have significant impact on
the members’ satisfaction with the quality of services in general and specifi-
cally the member service in terms of their relationship with the FOs.
Although the amount of time an FO has at hand appears to have decreased
based on the calculation of the number of members per FO and normal work-
ing hours, the management, board members, and front-line staff argued that
the CFOs assist FOs by replacing them in alternate weeks and taking most of
the responsibilities. Therefore, the service time given to members did not
decrease. The discussions with the pre-2001 current members did point out
that much of the member services were provided the same way as before.
There were a few groups that did indicate dissatisfaction due to these changes
in the caseload and the decreased time spent from FOs at the center meetings.
They also brought into discussion another consequence of scaling up.
Due to lack of skilled front-line staff, ASA had to transfer the more experi-
enced field staff from branch to branch to train the new staff and manage
the new branch. This frequent change of staff appears to have affected the
members’ satisfaction negatively. The qualitative data from the FGDs and
interviews also revealed that the changes had occurred differently and, thus,
had differing levels of effect across centers and branches. This section
mostly focused on the changes related to the quality of member service.
However, there are a number of changes that took place in the number and
type of services and products, as well as in their terms and conditions. Such
changes are also assumed to have affected the members’ satisfaction and
are, therefore, discussed below.
Scope of Outreach
This section discusses the results of Proposition C, which speculates that

due to scaling up, MFIs are likely to cut down some services, especially the
ones that are not producing any financial profit.
To measure mission drift in terms of scope of outreach, the current study
has primarily looked at changes in the number and type of financial and non-
financial services offered by ASA and used by members. The primary source
of data, which is MIS, offered only two indicators for which data was
tracked over time and was available. Those were the number of financial
services and the number of financial products within each service. Based on
the available data, first an index of mission drift on scope of outreach was
developed using the same method as used in the previous two domains of
mission drift. Because these indicators do not capture the range of products
and services that ASA used to offer and offer now, additional information
was gathered through the structured survey and FGDs with members as well
as the interviews with the management, front-line staff, board members, and
representatives of funding agencies. Such additional analyses provide
insights into the changes that took place during the scaling-up process on the
scope of nonfinancial services, terms and conditions of financial products,
members’ participation in various services.
Overall Findings of Mission Drift in

Terms of Scope of Outreach
Analysis of MIS data. The results of the analysis using MIS data indicate
there is no indication of mission drift; that is, ASA has not reduced the number
of financial services and financial products. In fact, ASA has expanded the
variety of financial services packages. Before the scaling up, ASA was offer-
ing two basic financial services, that is loans and savings in five products,
namely, loans for income generation, agriculture and essential purposes, and
compulsory and voluntary savings. In 2002, ASA added insurance as a new
financial service and housing loans as a new financial product. In 2003, ASA
added another financial service, pension, and bundled the three loan products
into one general loan product. The same services and products are offered in
all branches uniformly. Thus, all the three branches, like ASA as a whole, have
not experienced any mission drift in terms of scope of outreach. There was no
record of number and type of nonfinancial services and products offered by
ASA over the years. The existing data were mostly anecdotal. Therefore, they
were not included in computing the mission drift index in this domain.
However, a number of FGDs, in-depth individual and group interviews were
conducted with members, field staff, management, and board members. The
results of these interviews and discussions are discussed below to give a more
complete picture.
Analysis of survey data. To gain more in-depth understanding of members’

usage of services, the pre- and post-2001 members were asked to check all the
services that they were receiving or using at the time of the interview. The
analysis of the survey reveals that there is no significant difference between
pre-2001 and post-2001 members in terms of services received at the time of
the research. As Table 22 demonstrates, the majority of respondents were
using financial services, namely loans, savings, and insurance services.
Of the nonfinancial services, awareness training on addressing social
issues is the most actively received service for members who joined before
and after the scaling up followed by the networking federations. It is inter-
esting to note that compared to pre-2001 members, a larger percentage of
members who joined after 2001 reported that they were receiving awareness
training on addressing infrastructure issues, leadership skills training, gender
training, and marketing linkage at the time of the research. However, the dif-
ferences were not statistically significant at 90% confidence level (two-tailed
p value of less than 0.05).
The only significant difference was found in respondents’ participation in
rights-based groups: 11% of pre-2001 members participated whereas only
3.5% of post-2001 members participated in rights-based groups. In the ear-
lier years, ASA used to organize a group of 20 to 30 community members to
address particular rights-related issues, such as tenant-rights issues, quarry-
worker rights issues, or women’s rights issues. In the example of tenant-rights
issues, ASA provides a venue for the interested members to get together,
identify issues, discuss solutions, and take actions collectively. The costs
Table 22
Services Received by Members
Services Received Pre-2001 (%) Post-2001 (%) p Value
Financial services
Loans 93.6 95.6 .51
Savings 92.7 95.6 .29
Insurance 80.4 84.3 .36
Pension 11.4 10 .74
Nonfinancial services
Marketing linkage 3.2 4.1 .78
Matriculation school .5 0 1.00
Child labor school 0 0 NA
Information and communication
technology 3.2 1.2 .31
Rights-based groups 11 3.5 .01*
Election campaign 2.3 1.2 .47
Networking federations 7.3 8.2 .85
Leadership skill training 3.7 7.1 .17
Awareness training on addressing
social issues 9.1 9.4 1.00
Awareness training on addressing
infrastructure issues 4.1 9.3 .06
Awareness on political issues and
government system 2.7 2.4 1.00
Gender training 3.2 7.1 .09
Health training 5 2.4 .19
Not receiving any service 4.1 3.5 .79
*Difference is statistically significant at the p < .05 level.
were covered by funding provided by international donors, such as ActionAid

and Oxfam. However, the funding has stopped now, and there is no ongoing
funding to support this kind of activity. Furthermore, ASA has realized that
organizing members around a particular rights-based issue is not sustainable
not only because they do not generate any income but also because the groups
dissolve when the issue is resolved. Because of these reasons, ASA has
reduced its intervention to organize community members around rights-
related issues.
What are the changes that have taken place in financial services?
As discussed above, ASA introduced housing loans as a new loan product,
insurance and pension as new financial services. The majority of the group
indicated high satisfaction with these new services and products. Eight of
nine groups liked the insurance scheme most. However, members were not
clear about the specific terms and conditions of the insurance product. There
were many differing opinions among participants as to which were the cor-
rect terms and conditions. On the other hand, the introduction of pension
services was not much liked by members. Six of nine groups did not show
much interest in joining the pension scheme, and seven groups thought it was
adding to their financial burden because they are already paying for many
things, and putting aside money for pension was going to be another burden.
In addition to changes in the type of financial services and products, a
number of important changes were made in conditions and terms of the finan-
cial products. The participants in the FGDs indicated that those changes
affected their satisfaction either positively or negatively. Therefore, it is
important to learn about those changes and how they affected the members’
satisfaction.
Lower interest rate. Pre- and post-2001 members indicated a “lower inter-
est rate” as the most liked attribute of the program (48.8% and 57.8%, respec-
tively). This was reported by a larger percentage of post-2001 members.
However, the difference was not statistically significant with an exception of
members from Chozhan Nagar branch: 72.2% of post-2001 members com-
pared to 38.9% of pre-2001 members said they most liked “lower interest
rate.” One possible reason for this difference is that the pre-2001 members
might have been aware of the interest rate reduction because ASA had just
reduced its interest rate from 18% in 2000 to 12% at the time of the research.
Overall, the interest rate deduction was very much liked by members.
Withdrawal of voluntary savings from centers. Members can no longer

deposit their small voluntary savings when they come to the center meetings
every week. Instead, they have to go to the branch office which requires more
time and money for traveling. During the group interview, senior manage-
ment staff commented that the reason why voluntary savings are no longer
mobilized at the centers was because there had been many fraud cases. Center
leaders, who collected members’ small savings, were misusing members’ vol-
untary savings by lending to others without depositing at the branch office.
Because the voluntary savings are not a fixed amount, there was no way to
check the amount of savings the members had given to the center leader each
week, whereas compulsory savings were a fixed amount and thus, it was pos-
sible to check the total amount collected each week.
Now that members deposit their voluntary savings at the branch office,
FOs are released from their responsibility to record the transactions and,
thus, save some time. The deposit transactions are handled by accountants.
In a way, it therefore saves important time for FOs who need to be in the
field recruiting more members and, also, increases the control to prevent
fraud. However, from members’ perspective it increases their transaction
costs and, thus, discourages them to save up financial security for their
future. Seven of nine groups strongly indicated that they would like to con-
tinue voluntary savings at the center level because they felt the voluntary
savings were helpful for them to manage lump sum cash needs and emer-
gencies, such as in the case of inability to service the loan repayment.
Fees. A loan processing fee of 2% was introduced in 2003. The man-

agement group commented during a group interview that the reasons for
introducing this fee are: (a) financial institutions from which ASA borrows
for on-lending are charging a fee (cost of funds has increased) and (b) ASA
had to reduce its interest rate from 18% to 12% per annum because of the
Tamil Nadu State government ordinance that has placed a cap on interest
rates for retail lending. This appears to have increased the direct financial
cost of borrowing for members. However, when the total financial cost is
compared before (18% interest and no fee) and after the scaling up (12%
interest plus 2%), there is no increase. The members are still better off.
Change in loan sizes. ASA increased the size of first loans from rp. 2000 to
rp. 3000 but reduced the size of maximum loans from rp. 15,000 to rp. 10,000.
Although five of nine groups indicated high satisfaction with the increase in
first loan size, seven of nine groups said they were not happy with the cut on
the maximum loan size. They thought ASA reduced the maximum loan size
because of on-lending capital scarcity due to the recent rapid growth in the
membership. However, the management, front-line staff, and board said they
reduced the maximum loan size not only because of on-lending capital scarcity
but also because they perceived the members’ capacity to absorb loans had
deteriorated because of recent droughts in the area. There were also some mis-
perceptions about the size of loans approved. Participants in five groups said
they were not happy because they were given a smaller size of loans than they
asked for. They thought ASA was cutting down the size of the loan because of
on-lending scarcity, whereas ASA management and front-line staff said they
had to reduce the size of the loan because when they assess the members’
capacity to utilize the loan, the members usually did not have that capacity.
There were no changes regarding the loan term, repayment schedule and
group guarantee mechanism.
What are the changes that have taken

place in nonfinancial services?
ASA has been particularly focused on development activities, which are

referred to here as nonfinancial services. During the scaling-up process, a
number of new services are added, and a number of previous services have
been stopped or scaled down. According to members’ perception, the training
programs that teach members to write their signature, to increase awareness on
gender issues, various infrastructure and development issues, the political and
local governance system used to be given more emphasis prior to the scaling-
up period. At the time of the research, they felt the emphasis on these services
had reduced. Also, they said the senior FOs used to come to the villages and
identify local issues to be addressed collectively. There was no senior officer
coming to share such issues anymore. Specifically, seven of nine groups said
addressing issues and rights-based programs had been reduced.
Moreover, they felt previously ASA used to organize rights-based cam-
paigns by bringing together all members. They felt ASA was no longer
organizing such campaigns. However, the review of other sources of data
indicates that these perceptions are not always accurate. After all, they are
only perceptions. The review of archival documents provides evidence that
such campaigns were still conducted by ASA where all the women members
come together to show their strength and solidarity. This usually coincides
with the International Women’s Day on March 8, and thus is referred to
as the March 8th campaign or International Women’s Day campaign. Due
to increasing scale, ASA started to organize the campaign in several loca-
tions, instead of one, because bringing together all 60,000 or so members
in one place was a very challenging and not a very effective task. Perhaps
because of this change in organizing the campaign in different locations,
some members felt that ASA was no longer organizing campaigns of all
members.
On the other hand, the participants of the FGDs identified a number of
new nonfinancial services that ASA started to offer. Specifically, they men-
tioned the business development services (BDS) and Vidiyal Information
Service Providers (VISP). Although these new services received high satis-
faction, most of the members were not aware of them or did not have much
knowledge about these new services. Eight of 9 groups said they would like
to have more information about these new services and be able to fully
utilize them. The findings indicated a great need for promotion of the new
services to all members.
In addition, members indicated satisfaction with the increased emphasis
on providing information about government schemes, from which members
can access services that are not provided by ASA. Also, they feel proud of
the recognition some women members received at the Panchayat Raj level
as a result of election campaigns and awareness programs on local gover-
nance. They feel ASA is no longer giving much emphasis on educating
members about local governance and promoting them to take elected posi-
tions at the Panchayat Raj institutions.
Other stakeholders, namely the management, board members, and rep-
resentatives of funding agencies all believe that ASA has not and will not
eliminate the nonfinancial services because that is ASA’s strength and
because that is what the poor people need to move out of poverty. In the
words of those stakeholders, a representative of a funding agency said:
They [ASA] cannot cut down on development activities even if they are not
making money because they will lose their identity and cannot be competi-
tive. Because of development activities, they have a good reputation and are
competitive compared to other NGOs. When poverty is alleviated, they will
have to shift the focus or mission because the needs of the people will
change. The funding agency thinks ASA will have to change the services and
the composition of members only when the members are uplifted and their
conditions are improved. Before that happens, they are still providing other
activities not just microfinance, like education, infrastructure, sanitation,
group housing because these are very important services for the upliftment of
the poor and ASA is still providing them.
A board member said: “ASA still believes in the importance of training and
education in addition to the financial services.” Chairman said:
We have not changed our mission. We have changed only the entry point.
Instead of organizing people around development activities, we decided to
use microfinance as an entry point and use microfinance services to organize
people together. Then, from that platform we will continue to provide non-
financial services.
It all boils down to the vision of the chairman and the founder who still
has significant power over the strategic directions of the organization. During
the individual interview, he made it clear that he continues to believe that
poverty is a multifaceted complex phenomenon and, thus, needs a holistic
approach to address it. Financial services alone cannot reduce poverty.

However, the chairman also pointed out a change that ASA had made in
going about providing the nonfinancial services; that is, based on their ear-
lier experience, he and the staff at ASA learned that directly delivering the
nonfinancial services with its own staff is not effective and not sustainable.
It is also very challenging, if not impossible, to continue providing nonfi-
nancial services on a large scale. Therefore, ASA started looking for ways
to link members to available sources of nonfinancial services, while con-
tinuing to provide the services that are not available elsewhere. They started
to focus more on information services. VISP is an example of that change
in their strategy. Another way to make development services available was
perceived to be the networking and federation of women members within
the organization and with other networks, locally, nationally, and interna-
tionally. By enabling members to come together, talk to each other, learn
from each other, identify issues together, and address them collectively,
ASA would provide the opportunities for members to grow, and ASA can
do so on a larger scale. The more members join, the better the learning
becomes. As the chairman said, “This is the real learning. This is the real
development.”
This vision was consistent and was reaffirmed in the interviews with the
management staff and board members. It was clear from the interviews with
these various stakeholders that the new strategy to seek partners and alterna-
tive sources of nonfinancial services for ASA’s members was well communi-
cated and was perceived consistently across various levels of stakeholders.
What are the changes in procedures?
Introduction of CFOs
As discussed in the previous sections, one of the major changes that took
place due to the challenges of scaling up was the introduction of CFOs. The
FGDs with members spent significant time focusing on the effects of this
change as perceived by the members. Majority of the groups said they were
happy that ASA started to promote women leaders to take control over the
program and grow responsible (six of nine groups). Four of nine groups said
they were satisfied with the service of the CFOs in approving the loan at the
center level, taking responsibility for the repayment of center members,
informing members of the decisions and changes shared in the center leaders’
meeting at the branch office regarding the program and policies, and taking
up the roles of FOs during the center meetings. Also, the CFOs are given
training on various financial management skills, which the participants in

four of the nine groups liked very much.
However, the change was not welcomed by everyone. There were some
groups that expressed dissatisfaction with the idea of replacing FOs with
CFOs. Three of the nine groups thought the CFOs were not as clear as the
FOs in providing new information about the program. Furthermore, partici-
pants in three groups did not like the idea of paying compensation to the
CFOs out of the center fund, which is built with members’ contribution every
month. In four groups, some of the participants had experiences with the
CFOs who demanded bribes or fees during loan disbursements. There were
misunderstandings about such fees or bribes. During the interviews, the man-
agement and the board confirmed that there was no such policy for CFOs to
demand any fee from members. The policy in effect is to pay CFOs travel
allowance and compensation from the center fund. Each center has been col-
lecting rp 2 from every member each week to build this emergency fund. This
center fund concept existed even before the scaling up. It was used for any
emergency related to the center members, including repayment problems, fam-
ily emergencies, or for purchasing items for the center, such as a mat for
members to sit. However, when ASA promoted CFOs to deal with the
increased caseload and lack of front-line staff, ASA revised the policy on the
center fund usage; and now, the centers are expected to pay the CFOs from
their emergency fund. During the FGDs, participants in three groups suggested
that ASA starts paying for CFOs from its own payroll not from the center fund.
Despite the center fund issue, the majority of the groups were happy
with the introduction of the CFOs. Overall, the members said they are
highly satisfied with the transformation of center leaders into CFOs.
Duration of compulsory group activities

The participants pointed out that the duration of compulsory training and
the center meetings had become shorter. Every new member was required to
go through 7-day training before she became eligible for getting a loan. The
topics of the training used to cover introduction to the program, policies and
procedures, the detailed terms and conditions of the products. At the time of
the research, the training had been shortened to last for 5 days. In essence, it
has become 2 days shorter. The management and front-line staff claimed that
even though the training had become shorter, they still cover the same topics.
The members do not go through that training again and, thus, were not able to
make comparison. However, there was no indication of dissatisfaction with the
quality of training.
The other compulsory group activity is the weekly center meeting. The
members are still required to come to the center meeting every week. The
center meetings are expected to provide a platform or a venue for organizing
members, for empowering them through sensitization, collective actions, and
so on. The purpose of keeping the center meeting as a platform for develop-
ment was indicated by the management, board members, and the chairman as
a conscious effort or strategy to maintain ASA’s poverty alleviation mission.
The change that the members identified with respect to the center meetings
was the duration of each meeting, which was shortened from 1 hr to 30 mins.
The members are happy about this change because they feel now they can
spend more time for other responsibilities they have to take care, for instance,
household chores, business sales, or production. The management and front-
line staff explained that as a result of more streamlined procedures for finan-
cial transactions at the center meeting, they were able to shorten the duration
of center meetings. However, they claimed that the content of the center
meetings did not change.
Summary
The findings from quantitative and qualitative data show that ASA has
not drifted away from its mission significantly in terms of scope of out-
reach. There was some evidence of drift in terms of reducing the emphasis
on some of the nonfinancial services ASA used to provide. However, those
were due to a conscious strategic change that the management and the
board made. It was not because they decided to abandon or give less impor-
tance to nonfinancial services but rather to increase the effectiveness and
impact of such services on a larger scale.
These results of minimal to no mission drift did not happen by chance.
There were a number of strategies that contributed or enabled ASA to be
able to maintain its mission in the midst of challenges during its scaling-up
process.
Summary of Findings
The current study has empirically investigated the scaling-up process in

microfinance organizations and its affect on their poverty alleviation mission.
The data has revealed a number of important findings.
The results of empirical data, quantitative and qualitative, indicate that
ASA as a case of MFI has not drifted from its poverty alleviation mission
significantly when the drift is measured in terms of depth, quality, and scope
of outreach. In a few areas, there are minimal shifts to better-off members.
However, these shifts are trivial and do not necessarily imply an abandon-
ment of the poorer members. Moreover, the poverty assessment indicators
may be overrepresenting the better-off segment because of their limitations
to accurately capture the complex nature of poverty in a rapidly changing
society such as India. The findings also show that ASA has not reduced or
cut down the variety of financial and nonfinancial services, as speculated in
Proposition B. Rather, ASA has introduced a larger variety of services and
products to respond to the needs of its members and assist them in moving
out of poverty. This is done because ASA still believes poverty is a multi-
faceted social phenomenon and requires a holistic or comprehensive approach
to reduce it effectively.
The area that is most affected by the scaling-up process is quality of out-
reach. In particular, the caseload of FOs has almost doubled over the past 2
years leaving the FOs with about one half the time as before scaling up to
work with individual members. These changes did not seem to have nega-
tively affected the satisfaction of members with the overall quality of service.
However, the members’ satisfaction with the quality of member service from
FOs had dropped a little bit. Nevertheless, the majority of the members were
still happy about the performance of FOs. The participants indicated that they
were still satisfied with the individual attention, personal care, advice, unbi-
ased attitude, and additional information provided by the FOs. Participants in
a smaller percentage of the groups (less than one half of the total groups) said
the frequent transfer of staff and reduced attention of FOs to members were
not desirable changes. The survey of former members indicated that they
were satisfied with the program before they left and that none of them had left
because of the reasons related to scaling-up process and related changes.
They had left primarily because of problems in their own business or in the
external environment, not related to the program.
It can be concluded from the findings of the current study that mission
drift happens not because of deliberate decisions by the management or board
rather because of the challenges posed by the scaling-up process. At times, it
is not obvious or may not be measurable how much the MFI is drifting away.
A deliberate management system, including measurement and monitoring, of
performance with respect to social mission becomes an important agenda for
future research and policy making. When the MFI is aware of a possible drift
and the extent to which it is occurring, it can take necessary actions and put
in place strategies that would help to inhibit drift.
Notes
1. Although documents and historical records are good sources of information because
they are easily accessible and readily available and provide historical context, there are some
disadvantages. Because they were collected for other purposes, they do not precisely match
the information need of the research. Such historical data needs much manipulation. Also, they
were collected by people other than the researcher, the level of accuracy and reliability is ques-
tionable. In this study, mixed methods are used and thus, other sources of data complement
these weaknesses.
2. For the purpose of this article, only the summary of the findings is presented. More
detailed information on findings is available on request. Contact: gaamaa@ideasnet.org
References
Ashe, J. 2000. Microfinance in the United States: The working capital experience—Ten years
of lending and learning. Journal of Microfinance 2 (2).
Campion, A., E. Dunn, and A. Gordon. 2001. The transformation of Accion Communitaria del
Peru (ACP) to Mibanco. Retrieved May 1, 2001, from http://www.mip.org
Campion, A., and V. White. 1999. Institutional metamorphosis: Transformation of microfi-
nance NGOs into regulated financial institutions, Occasional paper 4. Washington, DC:
Microfinance Network.
Cherogony, M. 2001. K-Rep Development Agency (KDA): Microfinance for the poorest.
Paper presented at the Imp-Act Thematic Group meeting “Microfinance for the Poorest,”
Small Enterprise Foundation, Polokwane, South Africa, November.
Christen, R. 2000. Commercialization and mission drift: The transformation of microfinance
in Latin America. Retrieved April 12, 2001, from the Consultative Group to Assist the Poor
Web site: http://www.cgap.org/html/p_occasional_papers05.html
Churchill, C. 1997. Managing growth: Organizational architecture of micro-finance organiza-
tions. Retrieved April 5, 2001, from the Consultative Group to Assist the Poor Web site:
http://www.cgap.org
Creswell, J. 2003. Research design: Qualitative, quantitative, and mixed methods approaches
(2nd ed.). Thousand Oaks, CA: Sage.
Denzin, N., and Y. Lincoln. 1998. Strategies of qualitative inquiry. Thousand Oaks, CA: Sage.
Fisher, T., and S. Sriram. 2002. Beyond micro-credit: Putting development back into microfi-
nance. New Delhi, India: Vistaar Publications.
Gonzalez-Vega, C., M. Screiner, R. L. Meyer, J. Rodriguez, and S. Navajas. 1997. BancoSol:
The challenge of growth for microfinance organizations. Retrieved October 4, 2002, from
http://www.microfinancegateway.org/content/article/detail/1420
Howes, M., and M. Sattar. 1992. Bigger and better? Scaling-up strategies pursued by BRAC
1972-1991. In Making a difference: NGOs and development in a changing world, edited
by D. Edwards, 35-100. London: Earthscan.
Katsuma, Y. 1997. Transforming an NGO into a commercial bank to expand financial services
for the microenterprises of low-income people: PRODEM and Banco Solidario in Bolivia.
Technology and Developments 10.
Khandker, S. 2002. Does micro-finance really help the poor? Evidence from Bangladesh.
Retrieved October, 2002, from http://www.adb.org/Poverty/Forum/pdf/Khandker.pdf
Malhotra, M., and P. Fidler. 1995. Zimbabwe: Zambuko Trust. Retrieved October 24, 2003,
from http://www.worldbank.org
Otero, M., and E. Rhyne, eds. 1994. The new world of microenterprise finance: Building
healthy financial institutions for the poor. Bloomfield, CT: Kumarian Press.
Rhyne, E. 1998. The yin and yang of microfinance: Reaching the poor and sustainability.
Retrieved March 9, 2002, from http://www.microfinancegateway.org/download/yym.rtf
Rhyne, E. 2001. Mainstreaming microfinance: How lending began, grew and came of age in
Bolivia. Bloomfield, CT: Kumarian Press.
Robinson, M. 2002. Microfinance as a sustainable development tool. Paper presented at the
Asia Pacific Economic Cooperation (APEC) Ministerial Meeting on Small and Medium
Enterprises, Acapulco, Mexico, June.
Schreiner, M. 2002. Aspects of outreach: A framework for the discussion of the social bene-
fits of microfinance. Journal of International Development 14:1-13.
Simanowitz, A., and A. Walter. 2002. Ensuring impact: Reaching the poorest while building
financially self-sufficient institutions, and showing improvement in the lives of the poorest
women and their families. In Pathways out of poverty, Vol. 1, edited by S. Daley-Harris,
4-70. Bloomfield, CT: Kumarian Press.
Summit, M. 2005. The state of the Microcredit Summit Campaign Report. Retrieved August
2006, from Microcredit Summit Web site: http://www.microcreditsummit.org/pubs/reports/
socr/2005.htm
Sustainable Banking with the Poor. 2002. Non-governmental organizations in microfinance:
Past, present and future. Retrieved October 24, 2003, from Microfinance Gateway Web
site: http://www.microfinancegateway.org/... SBP/NGOs_Tom_Final.pdf
Tamil Nadu People’s Forum for Social Development. 2001. Tamilnadu social development
report 2000. Chennai, India: Author.
Todd, H. 2000. Poverty reduced through microfinance: The impact of ASHI in the Philippines,
an ASHI-CASHPOR-PHILNET impact assessment supported by AIMS project. Seremban,
Malaysia: CASHPOR Technical Services.
Valenzuela, L. 1998. Commercial bank downscalers in Latin America, Microenterprise
Development Brief 37. Washington, DC: U.S. Agency for International Development.
Gaamaa Hishigsuren, PhD, has taught, researched, and written on various topics related to
managing growth, institutional transformation of microfinance nongovermental organizations
(NGOs), rural finance, social performance management, impact evaluation, poverty assessment
and institutional appraisal. She received the first place award from Research Symposium at
Microenterprise Conference held by Brigham Young University in 2004. In 2006, she was
awarded by Small Enterprise Education Promotion network as the Individual of the Year for her
contribution to member learning and dissemination through publications. She is selected by the
Microcredit Summit secretariat as the lead workshop author on “Transformation of Microfinance
NGOs to Regulated Financial Institution” at Global Microcredit Summit in 2006. She has pro-
vided consulting services in impact evaluation and poverty assessment of microfinance programs
in Uganda, Ghana, India, and Mongolia using AIMS-SEEP impact tools. She has been a con-
sultant for major international organizations, including International Finance Corporation,
Consultative Group to Assist the Poor, U.S. Agency for International Development, Japan Bank
for International Cooperation, UN Development Programme, among others. In 2005, she served
as a visiting researcher at Asian Development Bank Institute. Currently, she is manager, Rural
Finance, Mennonite Economic Development Associates, a fellow at Microfinance Management
Institute, and an adjunct faculty at Milano School of Management and Urban Policy,
Southern New Hampshire University, and National University of Mongolia.

Evaluating Mission Drift in Microfinance

Uploaded by

Copyright:

Available Formats

You might also like

Evaluating Mission Drift in Microfinance

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Evaluating Mission Drift in Microfinance

Uploaded by

Copyright:

Available Formats

Evaluation Review

Lessons for Programs

The article contributes to a better understanding of implications of scaling up

Keywords: microfinance; mission drift; poverty alleviation; scaling up

M icrofinance refers to the provision of small-scale financial services

The literature on the process of scaling up largely focuses on organi-

The inquiry relies on multiple sources of evidence for confirmation of

Proposition A: Depth of outreach or poverty outreach: Due to scaling up, MFIs

Measures of Mission Drift

• depth of outreach or poverty outreach: poverty level of clients at entry to the

The following set of indicators is developed in each of the dimensions to

Measures of Depth of Outreach or Poverty Level

1 Size of building Big (4) Medium (2) Small (0)

Greater than 8 points Less poor

Monthly household income per capita. Income is a common measure of

Caste. Caste is used as an additional indicator of poverty level of new

Geographical distribution of membership. Poverty is generally more preva-

Sectoral distribution of loans. Some sectors such as agriculture and manu-

Overview of Information Used

(a) Contextual information on ASA including information on the origin, set-

organization, administration and staffing, recruitment of borrowers, and

Plan and Methods of Data Collection

Current members 126 112 238

at a time convenient for the researcher (an unobtrusive source of informa-

FGDs Current members 9 groups 108 (9 groups)

Note: FGDs = focus group discussions.

from members’ perspectives. On average, each group had 12 participants.

Findings on Mission Drift2

Findings on mission drift are grouped and reported in three dimensions:

Note: FO = field officer; ASA = Activists for Social Alternatives.

After the analysis of the quantitative data, additional analysis of qualitative

Summary of Mission Drift Findings

Average size of loans Pre < Post

Average size of loans 1660 1517 –9 No –9

Note: FO = field officer.

Agricultural loans 3 Average size of loans 0

Analysis of Survey Data on Depth of Outreach

*Difference is statistically significant at p < .05 level.

Pre-2001 (n = 126) (%) Post-2001 (n = 112) (%) p Value

No. of loans taken 2.5 1.7 .00

Government self-help groups 10.50 5.80 .14

Other than ASA, the respondents do not participate or receive services

Is ASA moving up to serve better-off clients?

Also, the government of India started to provide free housing, referred to as

A representative of a funding agency said:

Manapparai 988 1138 1593

Why did the average loan size decrease

Why is there an increase in the nondalit members?

Depending on the area, the composition of dalits and non-dalits in a particu-

Why has the proportion of rural members decreased relative to the

Why have loans for agricultural purposes declined?

alleviation mission–driven organization, ASA emphasized the importance

Overall Findings of Mission Drift in Terms

Quality of member service 81.4 75.4 89.8 .00

Member herself 86.9 84.2 .71

Reasons for former members’ departure. One of the proposed indicators

Reasons outside the program and my business 35.4 36.6 .42

Change in ASA’s loan policy due to its recent

Eligibility requirements have become stricter 10.3 6.7 1.00