• agency;
  • embeddedness;
  • microfinance;
  • organizational routine;
  • sociological citizenship;
  • street-level bureaucracy


This article explores how loan officers enact and adapt organizational policies within microfinance institutions. Some loan officers frequently bend or choose not to enforce written rules in an effort to better address client needs, while others enforce the rules strictly. These differences in enforcement styles are analyzed to explore the structural characteristics that generate and sustain rule-bending behavior. In microfinance, the pressures to standardize and automate lending decisions challenge loan officers' ability to manage clients because context uncertainty cannot be fully captured by centralized policies. The article shows that officers exercise discretion productively, as measured by the organization's own criteria to (i) better serve client needs when policies can lead to bad outcomes; (ii) purposefully improve the rules themselves; and (iii) defend loan officer status within the organization. The article unveils two inherent tensions in microfinance. First, increased efforts to centralize and enforce policies in fact only increase the motivation for loan officers to work outside the organization's regulations. Second and ironically, the value of the productive rule bending displayed by some loan officers is best captured when other officers are strict enforcers.