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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Internal Audit and IT-Based MIS System
Microfinance is all about managing operations and risk, and therefore requires an efficient monitoring system. Audit plays this function. An IT-based MIS system helps the auditors in analysing large numbers of branches quickly and efficiently, thus reducing cost and saving time with more accurate and reliable results. IT-based MIS is can therefore significantly enhance the capability of internal auditors.
Risk Management Poverty Scoring Part 2
In this video series-2, Mark Schreiner, Director, Microfinance Risk Management, explains the methodology of Poverty Scoring and the challenges in implementing the system.
Risk Management Poverty Scoring Part 3
In this video series-2, Mark Schreiner, Director, Microfinance Risk Management, explains the methodology of Poverty Scoring and the challenges in implementing the system.
Removing the Pain from Using Cash: An M-banking Solution?
This IFN expands on the cost of cash research, and presents the key findings from the study undertaken and provides insights on how an organisation may apply the tool’s findings in an e- or m-banking scenario. Understanding customer pain points and what value can be created by offering a new, improved one is important for mobile money stakeholders to deliver the right services to the right customers at the right price. The research tool used to assess these is described in more detail in IFN 51 “Understanding the ‘Cost of Cash’ for Low Income Clients: Why and How?”
SPM Case Study: Nirantara – Building a Sustainable Social Enterprise
MicroSave conducted a Social Performance Management (SPM) exercise with Nirantara to help the organisation better align its operations and strategy with its social mission. The focus was on client needs and preferences. Nirantara Community Services (Nirantara) was founded in 2006 as a Society, with a vision to provide need-based and cost-effective financial services to underserved women. It presently manages a portfolio of Rs.55 million and works in peri-urban and urban areas of three districts of Karnataka (Bidar, Gulbarga and Bijapur).
MicroSave’s SPM Interventions were focussed on the :
Holistic strategy to address client needs. Provision of non-financial services such as education along with microfinance, accordingly.
Credit Risk management through clearer client- profiling
Analysis of social indicators in MIS
Performance development of staff through incentives and training
The intervention led to significant improvement in staff productivity, client dealings through functional literacy programmes, and focus on social orientation through provision of non financial services such as pre school education.