By Pedro Pinheiro | 15.04.2026
At a moment when diversity and inclusion (D&I) policies stand at a political crossroads in advanced and developing economies, companies have started to scale back their commitments to gender equality and the inclusion of underrepresented groups such as persons with disabilities, LGBTQ+ individuals, ethnic and racial minorities, and other historically marginalized communities. After a decade of expansion, these initiatives are now seen by some companies as a liability, particularly in contexts where they may risk disqualification from public contracts or invite political and regulatory scrutiny. For microfinance organisations, however, these commitments are central to their mission and should be strengthened within their strategy, not scaled back, to avoid drifting from their foundational purpose.
In an article published in the Financial Times early in 2025, Dr. Raghuram Govind Rajan, former Chief Economist of the International Monetary Fund and Professor of Finance at the University of Chicago Booth School of Business, questioned whether the scaling back in D&I policies that was making headlines or being implemented silently within companies at that time showed that those policies had been, in fact, “performative political theatre” aimed at rebuilding corporate legitimacy after the global financial crisis.
If those policies were merely performative, the image that helped justify them remains telling. A widely circulated Reuters photograph of bankers gathered at the Lehman Brothers London office on the eve of its collapse became an enduring symbol of the crisis: rows of men in near-identical white and blue shirts making the case, visually, for what a lack of diversity in decision-making can look like (see photo).
Photography by Kevin Coombs and Reuters Photographers. Reporting by William Schomberg
Dr. Rajan argued that “the primary purpose of a private corporation is to sell a desirable product or service at an attractive price while obeying the laws of the land” and that “a public corporation does not need to do more social good to justify its existence”, this being the distinction from an NGO. And while there are needed social actions that do not directly benefit the corporation’s purpose but benefit society at large, these are probably better left to governments to either undertake, subsidize, or mandate through regulation.
However, the author recognises that many actions aligned with a company’s core purpose of generating profit in the long-run may also fall under corporate social responsibility. In the context of D&I, firms can perform better by identifying and nurturing talent in traditionally overlooked groups and by reflecting the communities they serve — for instance, through local representation that strengthens understanding and trust. When properly considered by boards and articulated by management, such actions provide defensible ways to deliver on social responsibilities without being overly exposed to shifting political winds. The experience of microfinance organisations — specialised financial institutions often associated with NGOs, though not exclusively — provides clear evidence of this.
The history starts in the 1980s, most notably with Grameen Bank in Bangladesh, when one of the core premises of microcredit was that low-income women were not only creditworthy, but often more reliable borrowers. The success of microfinance to date is, in many ways, proof that this initial bet was right, and this logic continues to underpin a wide range of programmes around the world. It has been further developed, for example, by Self Employed Women’s Association (SEWA), which organises women in the informal economy in India and provides integrated financial and social services through its banking arm, recognising their central role in households and communities. Similarly, CARD Pioneer Microinsurance applies this approach in microinsurance, relying largely on a female workforce — the “nanays” — as trusted distribution agents to reach underserved populations, particularly other women in their communities. And these are just a few of many examples.
The evidence from women-focused programmes shows that integrating women-led models to serve female clients can strengthen outreach, impact, and even profitability. On the organisational aspect, what most women-led microfinance programmes have in common is that, even where leadership is not exclusively female, they are powered by a large base of women who provide critical input into the design and delivery of financial services and build trust with clients by ensuring there is someone on the other side who understands their realities. They also bring a strong sense of ownership and drive, making the most of the opportunities available to them in labour markets that have often excluded them.
The same logic could be extended to other underserved groups, such as marginalised LGBT+ populations, for example, who in many contexts are bearing the brunt of funding cuts to human rights and inclusion programmes in the developing world, while still experiencing systematic exclusion from formal labour markets due to discrimination, harassment, and stigma. Employing them and providing financial services tailored to their specific constraints may offer a pathway to economic empowerment and, in extreme cases, to survival. And what the experience shows is that it could still represent a sound business opportunity.
The history of the Luxembourg Award for Inclusive Finance illustrates how D&I is a powerful strategic driver in microfinance. Past editions have focused on vulnerable, underrepresented, or minority groups often seen as difficult or commercially uncertain target segments: from women to forcibly displaced people and refugees, and beyond. Even in editions with a broader thematic focus such as food security or housing, finalists have tended to target specific underserved segments, such as small business owners or rural communities.
This year’s award turns to youth, showcasing initiatives that promote financial inclusion and support the transition from childhood to adulthood through access to appropriate financial tools. Crucially, eligibility requires projects to have been operational for at least two years, with financial sustainability being an important aspect of the evaluation criteria.
The microfinance model has always relied on proximity, trust, and a deep understanding of underserved communities, qualities that depend on diverse and inclusive organisations. At a time when D&I is being questioned elsewhere, microfinance organisations cannot afford to treat it as “performative political theatre”. D&I are core strategic pillars that must be reinforced to ensure delivery on the mission of microfinance organisations.
This article was written by Pedro Pinheiro, Knowledge and Strategic Partnerships Manager at the Microinsurance Network, as part of the InFiNe Scholarship Programme 2025, to which he was selected. Learn more about the Scholarship Programme
Photography by Kevin Coombs and Reuters Photographers. Reporting by William Schomberg
