Can Microfinance Institutions Achieve the Double Bottom Line? Evidence
from Global Panel Data

Dr. Gopal Kumar Sarma

doi:10.46609/IJSSER.2026.v11i07.017

Title: Can Microfinance Institutions Achieve the Double Bottom Line? Evidence from Global Panel Data
Authors: Dr. Gopal Kumar Sarma
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 7 Publication Date: July 2026 DOI: 10.46609/IJSSER.2026.v11i07.017
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Dr. Gopal Kumar Sarma Associate Professor in Economics, Baosi Banikanta Kakati College, Nagaon, Barpeta, Assam, INDIA
MLA 8 Sarma, Dr. Gopal Kumar. "Can Microfinance Institutions Achieve the Double Bottom Line? Evidence from Global Panel Data." Int. j. of Social Science and Economic Research, vol. 11, no. 7, July 2026, pp. 3112-3127, doi.org/10.46609/IJSSER.2026.v11i07.017. Accessed July 2026. APA 6 Sarma, D. (2026, July). Can Microfinance Institutions Achieve the Double Bottom Line? Evidence from Global Panel Data. Int. j. of Social Science and Economic Research, 11(7), 3112-3127. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i07.017 Chicago Sarma, Dr. Gopal Kumar. "Can Microfinance Institutions Achieve the Double Bottom Line? Evidence from Global Panel Data." Int. j. of Social Science and Economic Research 11, no. 7 (July 2026), 3112-3127. Accessed July, 2026. https://doi.org/10.46609/IJSSER.2026.v11i07.017.
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ABSTRACT: The rapid commercialisation of microfinance has highlighted the debate on whether microfinance institutions (MFIs) can be financially sustainable without compromising their social mission. This study explores the Double Bottom Line (DBL) by examining the relationship between financial sustainability and social outreach using a global panel of 2,876 institutionyear observations from 1,028 MFIs from the MIX Market Financial and Social Performance databases for the period 2007–2018. Financial sustainability is measured by Operational SelfSufficiency (OSS) and Return on Assets (ROA). Social outreach is captured by outreach breadth, the share of female borrowers, and average loan balance as a percentage of GNI per capita. The study employs fixed-effects panel regression models to account for unobserved institutional heterogeneity and time-specific effects. The results show that outreach levels and the share of female borrowers do not have a significant impact on financial sustainability. However, the depth of outreach is strongly associated with financial performance, indicating that serving poorer clients with relatively small loans is consistent with sustainability. Portfolio quality and operating efficiency drive financial sustainability. MFIs that are financially sustainable are better positioned to expand their outreach over time. The results support the institutionalist theory over the mission drift hypothesis, suggesting that financial sustainability and social outreach are complementary rather than conflicting goals. This study contributes to the DBL literature by providing international evidence and offers policy implications to foster a financially sustainable and socially inclusive microfinance system.

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