Paper short abstract:

This paper identifies and critically assesses ongoing changes in the assumptions, theories and practices of programmes that target poor people with financial services in the name of developmental outcomes.

Paper long abstract:

Microfinance is a key element in the global push for financial inclusion. While the terms "microfinance" and "financial inclusion" are increasingly used interchangeably, the ongoing shift from microfinance to financial inclusion signifies not only changed rhetoric. This paper examines core assumptions in microfinance programming, and compares them with the assumptions made in financial inclusion programming. It contrasts the different theories of change inscribed into these programmes. And it critically inquires about changes in practices (including the how and why of these changes), such as shifts in relevant actors and technologies. It suggests that neither seeing financial inclusion as just a new label for microfinance ("old wine in new bottles"), nor as a radically new programme that replaces microfinance with something better, is adequate. Instead, studying processes of institutional path dependence, bricolage and agency at work provides a better understanding that emphasises both elements of continuity and change.