The research paper traces the origin of microfinance, establishes the fact it existed in some form since early days and that it is as old as human civilisation itself. The study also analyses the growth, spread and development of the sector in terms of the transformations undergone from its humble beginning and relates it with some of the fundamental objectives for which it came into being. Seven distinct phases have been identified in the growth of this vital sector. The study attempts to analyse and bring in the transformational changes that have come in the microfinance sector with its growth. It also seeks to understand, classify and categorise these changes and tries to establish explanations for the possible reasons. The most important part is that it identifies nine major aspects that are the paradigm shift in the process of transformation to its present stage. These aspects are termed as social drift, mission drift, vision drift, operational drifts, commercialisation drifts, modernisation drift, realisation drift, survival drift and regulatory control drifts. Each aspect is explained based on the current level of knowledge and research outcomes. Based on the analysis of trends the study proposes a route map that paves the way for the future termed as Responsible Microfinance outlining the various aspects that have to come in under this broad umbrella. The possible regulations and rulkes to establish a level playing ground which warrants fair and just practices are also spelled out. The study also proposes a model of responsible microfinance combining the basic ethos on which it s founded and the modern principles of financial management.