The briefing note discusses the shift towards a market led approach in microfinance. It raises several questions relating to clients’ shifts in preferences, their exit and switching over to competitors’ products. This note identifies three components of market led approach—the client-product nexus, linkages between clients and institutions and the client’s financial landscape. It concludes with highlighting the emerging trends in microfinance which bring out some operational benefits that enable MFIs to lower service delivery costs, attract new clients and retain existing ones, all factors that contribute to long-term sustainability.

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