Challenges for financial inclusion through microfinancing: the goal incongruence between top management and the loan officers

The drift of mission from social orientation to commercial orientation has created issues at the firm level as well as the social level. Foci of the study to explore the reasons for emerging issues in the microfinance field. Mainly through a qualitative approach and from the agency theory standpoint, the study attempt to answer why and how goal incongruences occurred between top management and loan officers. The thematic analysis results reveal that institutional process, agency variables and cost, and personal reasons of loan officers, including self-interest,have contributed to the goal incongruence. Notably, the inability to verify the loan officer’s behaviour and manage bonding cost and monitoring cost at an optimal level due to weaknesses of the internal process can be recognised as the causes for the goal incongruence. In addition, theoretical contribution, implications, and limitation of the research are also considered and discussed.