PERTANIKA JOURNAL OF TROPICAL AGRICULTURAL SCIENCE

The objective of this paper is to determine the dominant orientation of microfinance providers in serving poor and micro-small enterprises through the use of group-lending approaches. The research analysed the decision-making processes undertaken by microfinance providers in their conduct of group lending. Recent developments in microfinance practice, in which the focus on achieving financial sustainability (commercial orientation) dominates, are leading to a shift away from the sector’s original socially orientated mission. This research is therefore aimed at addressing a developing gap in the study of financial intermediation with respect to the orientation of microfinance. Complexity in the relationships between causal and mediating factors, together with random environmental noise, causes difficulties in determining intangible and immeasurable parameters. Taking these conditions into consideration, this study employed Delphi and analytic network process (ANP) approaches as its methodology. Based on Delphi−ANP analysis of four main aspects of microfinance − objective, outreach, services, and impact, this study revealed that, in general, the social orientation of microfinance institutions still existed in their group-lending strategies.