Microfinance In India: Built On Sales Targets or Loyal Clients?

Abstract:

The core market for MFIs is the very weaker sections as defined by the priority sector lending requirements of the Reserve Bank of India. As such, MFIs offer a tremendous opportunity for the state, (which wants to see these vulnerable groups "financially included" with access to a range of financial services, particularly credit) and to the banks, (which need to achieve their priority sector lending requirements). Strong relationships and in-depth understanding of the needs of clients are key to addressing the problems of multiple borrowing and over-indebtedness. MFIs will need to diversify the range of services they offer to encompass insurance, savings and even remittance services - probably through m-banking platforms.

Tags: IFN 42, South Asia, India, Microfinance, Retail banks , Industry analysis, Institutional change, Supply side assessment, SKS, Priority sector, Financial access, Access to finance, Unbanked, Rural, Multiple lending, Graham AN Wright, Wright, MicroSave, MicroSave india, IFN42