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The sustainability of what?: The challenge for microfinance in Australia

Third Sector Review
Volume 19 Issue 1 (2013)

Abstract: Internationally, there have been two main approaches to assessing sustainability in microfinance: the Financial Systems Approach and the Poverty Lending Approach (Robinson 2001). The former emphasises commercial profitability in order to cover the costs of servicing the poor, while the latter advocates for subsidised credit, arguing that the poor are unable to afford high interest rates. Drawing on a critical review of academic literature, government reports and policy documents within the microfinance sector in Australia, this paper reports that sustainability assessments privilege financial interpretations. However, this is problematic because such evaluations can undermine the continuity of programs that seek to serve vulnerable sections of the population. In order to broaden the discussions surrounding sustainability, this paper employs the theoretical framework of the Capability Approach. By simultaneously developing the financial and social dimensions of key performance indicators of microfinance institutions, this paper demonstrates the practical applicability of the Capability Approach to include financial as well as social, political and environmental outcomes, in order to arrive at a robust understanding of sustainability in Australian microfinance.

To cite this article: Voola, Archana Preeti. The sustainability of what?: The challenge for microfinance in Australia [online]. Third Sector Review, Vol. 19, No. 1, 2013: 127-146. Availability: <;dn=568718104757656;res=IELAPA> ISSN: 1323-9163. [cited 23 May 17].

Personal Author: Voola, Archana Preeti; Source: Third Sector Review, Vol. 19, No. 1, 2013: 127-146 DOI: Document Type: Journal Article ISSN: 1323-9163 Subject: Sustainable development--Economic aspects; Microfinance; Public utilities--Finance; Poverty--Economic aspects; Peer Reviewed: Yes

Database: APAFT