Microfinance has traditionally focussed on credit only, but research has clearly demonstrated the poor’s wide range of needs for financial services. However, Indian microfinance institutions (MFIs) cannot, by law, offer savings, insurance or remittance services on their own. On the other hand, formal players have not been able to service the MFIs’ low income market. However, there are a few examples where MFIs have overcome the challenges faced and offered diverse financial products by partnering with formal financial institutions. In this note, the authors explore the options for partnerships between formal financial institutions and MFIs, and how they can, together, contribute to the ultimate goal of financial inclusion.

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