The data on profitability start with an important finding: earning profits does not imply being a “for-profit” bank. Most microfinance institutions in our sample that have total revenues exceeding total costs in fact have “non-profit” status. They are earning profits in an accounting sense, but as non-profits they cannot distribute those profits to investors. The distinction is important, as it means that the microfinance industry’s drive toward profitability does not necessarily imply a drive toward “commercialization,” where the latter status reflects institutions that operate as legal for-profit entities with the possibility of profit-sharing by investors. If.
