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Product Features of Micro and Small Enterprises Lending (1/2)

Posted on by Parul Tandon

Many MFI’s have started to introduce individual loan as one of their product offerings. They see individual loans as a good business opportunity and as an effective mechanism to help clients in business activities. Market research is a pre-requisite for launching a successful new product offering. MFIs must carefully dwell upon important product features of individual loan before rolling out the product.

This note attempts to highlight the key product features which an MFI must focus on, before offering individual loan product to the clients are as follows:
– loan size
– loan term
– repayment frequency
– pre-closure rules

Who Says You Can’t Do Micro Savings in India? Part 4: Practical Next Steps

Posted on by MSC

This note explores that majority of the savings product currently available to the poor are mainly those that have been either in existence for quite some time now or have been replicated from somewhere. These products fail to understand the customised needs of the poor clients and thus lack adaptability.

Several researches including “”Portfolios of the poor”” have shown that poor people do and want to save for life cycle events like marriages illness etc. Poor’s dependence on community based services exposes the fact that the current offerings do have certain hurdles for the poor to access services from the current service providers.

The note discusses a few important points that financial service providers should focus on while designing and rolling out a savings product for clients.

Who Says You Can’t Do Micro Savings in India? Part 3: So Where to Go from Here?

Posted on by MSC

This note explores that majority of the savings product currently available to the poor are mainly those that have been either in existence for quite some time now or have been replicated from somewhere. These products fail to understand the customised needs of the poor clients and thus lack adaptability.

Several researches including “”Portfolios of the poor”” have shown that poor people do and want to save for life cycle events like marriages illness etc. Poor’s dependence on community based services exposes the fact that the current offerings do have certain hurdles for the poor to access services from the current service providers.

The note discusses a few important points that financial service providers should focus on while designing and rolling out a savings product for clients.

Managing Micro and Small Enterprises Lending

Posted on by Parul Tandon

The note discusses the prevalence of group lending methodology which has been in existence for quite some time now. Majority of the MFIs use this methodology for their operations and are well versed with its nuances. Individual Lending (IL) has emerged out as a new product that many MFIs have started to offer to their clients.

Individual lending being a completely different product requires different set of skills all together. It has its own customised lending processes and operations. This note attempts to substantiate the various important issues of the lending cycle for individual loan.

Who Says You Can’t Do Micro Savings in India? Part 2: “Conventional Finance”

Posted on by MSC

This note focuses on conventional and regulated sector of the Indian financial market, which has its own set of opportunities and challenges. It describes the operational and financial information of:

Banks
Regional Rural Banks (RRBs)
Post Offices

This note attempts to focus on challenges and opportunities that formal financial institutions face while working with the poor. Formal financial service providers like banks, regional rural banks and post offices have tried to achieve financial inclusion. This note tries to substantiate the different concerns of these service providers by pulling up statistics from various sources.

Who Says You Can’t Do Micro Savings in India? Part 1: Community-Based/Owned

Posted on by MSC

Financial institutions in India were so far more focussed on providing group based microcredit. But the need of the poor for quality market-led financial products does not end here. Poor need a range of financial products and not just microcredit. Considering this fact financial inclusion has become a part of the mandate of Indian government system. This makes micro savings an often-discussed topic now-a-days among financial institutions and development practitioners.

It is a common misconception that micro savings is not possible in India because of the strict regulatory rules. There are several ways in which saving options are available in India. These can be categorised into two major categories.

The less regulated informal sector that comprises of SHG’s, cooperatives and chit funds, etc., and
The regulated formal sector and this includes banks, regional rural banks, postal services, etc.

Informal sector presents some challenges and have their own strengths. This note attempts to provide a brief profile, of some of the micro savings options provided by informal and community-based/owned methods.