Purpose – The purpose of this paper is to show that the microfinance industry practices can benefit from the culture and spiritual traditions of a country. Design/methodology/approach – The authors use the Bhagavad Gita and the codes of Manu and Kautilya to describe the background of Hindu teaching and practical wisdom. The authors use a case study of a Hindu microfinance institution (MFI). Findings – The authors find that Indian spirituality is a case-based application of learning through experience. Research limitations/implications – The case used in this study is one of a religious organization led MFI. It would be interesting to have follow up case studies of for-profit organizations and study their philosophy and links to spiritual traditions. Practical implications – The authors find that business in general, and MFIs in particular, should adopt risk-based pricing. The specificities of each product, its delivery and price should be based on continuous learning from experience of helping customers. Thus a case-based approach to product development and pricing is required. Social implications – This paper is a response to the current criticism of microfinance and argues for more tolerance on the part of society and more sensitivity on the part of MFIs. The case study shows that with the right attitude, it is possible to balance societal interests, customer needs and the institution's growth. Originality/value – This is the first paper on microfinance which looks at outsourcing from a spiritual viewpoint and launches a debate on whether “playing God” is useful.
Gandhi would have argued that microfinance should focus on the poorest. Gandhism would require that microfinance revert to its initial objective of helping the poor to help themselves out of poverty. Social impacts should come before financial profits. The greater impact would require providing a wider panorama of financial services. Microfinance providers should be encouraged to experiment and learn.
A capital‐raising deal for London‐based micro‐lender demonstrates how it is possible to make unsecured loans to financially excluded individuals in London.
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