MICROFINANCE : SOCIAL ENTREPRENEURSHIP AND SOCIAL CONSCIOUSNESS-DRIVEN CAPITALISM?

Microfinance, a recently coined vocabulary in rural finance literature, refers to small-loan commercial bankingfacilities created specifically for meeting the financial needs of the poor. This financing program is different fromthe traditional microcredit program in that the former has profit motives, while the latter being non-profitNGOs, do not. Because of this commercial feature, microfinance programs are susceptible to criticism. Toundermine the severity of this criticism, suggestions are being made to treat them as social-consciousnessdrivencapitalist ventures and their owners as social entrepreneurs. This paper investigated this overwhelmingproposition, particularly in the light of Adam Smith's moral and economic theories. The analysis seems to suggestthat the proposition has difficulties both from theoretical and policy-making perspectives.