Abstract
Microfinance has been hailed as a “magic bullet” for poverty alleviation and women’s empowerment, and many believe that microfinance organizations (MFOs) can help the world’s poor move up the socioeconomic ladder. However, MFOs are also under increasing pressure to demonstrate high levels of organizational efficiency, economies of scale, and strong financials. The expectations facing these organizations are thus inherently contradictory: MFOs must do good and at the same time do well. In this dissertation, I focus on the expectations and demands imposed on MFOs by external evaluators. More specifically, I investigate how rating practices and the idealized organizational images that these project were constructed and worked in the Indian microfinance sector from 1999-2014. Through their credit recommendations, rating agencies not only direct the flow of resources in the market; their assessments also constitute a type of normative guidance for MFOs, signaling a set of criteria and ideals for how organizations should act and be structured, as well as which goals should be prioritized and pursued. In my analysis, I identify three sequential and distinct idealized images which are encoded in the rating reports during the study period. This means that ratings lead to the reinforcement of one particular model of conducting microfinance. I also find that prominent raters play a dual role. First, they inform MFOs about the idealized image by codifying what “is out there”, thus explicating institutional pressures. At the same time, they also actively contribute to the construction of idealized images, thereby suggesting which organizations and organizational features should be bestowed with legitimacy. The construction of the idealized image is found to be more noticeable during the early years of the study period, when the field was newly emerging.