In this video MSC expert Anant Jayant Natu talks about the inherent constraints in the operational context of microfinance institutions (MFI) that limit the possibility of a rigorous focus on product development. He also touches upon some factors that can drive the product development process in spite of these constraints. The intangible nature of financial product and a demand driven microfinance market are presented as two key reasons for MFIs’ lack of interest and focus in product development. However, under competitive pressures faced in maturing markets, where client retention and market expansion become an absolute necessity for survival, MFIs have indeed shown that they adopt product development as a deliberate strategy.

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