Social Performance Management (SPM) – putting mission into practice – is increasingly relevant to the Indian microfinance sector, which may be on the brink of a ‘perfect storm’: a push for high growth and expansion coupled with growing over-indebtedness of clients, increasing competition, aggressive collection practices and the entry of private equity and investors looking for returns. With so much at stake, Indian MFIs need to find a greater balance between their social and financial bottom lines. Market-led SPM can help to ensure an MFI meets its mission and manages these growing risks while improving overall performance. In sum, a market-led approach to SPM is one part “truth in advertising”, one part “risk management” and one part “common business sense”.
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Savings Booklet
The Savings is the third publication under the Optimising Performance and Efficiency (OPE) Series. The OPE Series brings together key insights and ideas on specific topics, with clear objective of providing microfinance practitioners with practical and actionable advice.
This Savings Booklet brings together a set of brief publications which delve into MicroSave’s rich sectoral expertise and experience and combines it with the views and opinions of leading practitioners so as to stress on the need for savings services among the underprivileged clients, highlight the opportunities presented for delivery of such services and some challenges encountered in the provision of savings services to the poor. It highlights many of the opportunities, needs, issues and challenges facing those who would provide appropriate, market-led savings services for the poor.
The compendium is divided into three main sections:
The Demand for Savings Services Amongst the Poor
Opportunities and Challenges of Supplying Savings Services to the Poor
Regulatory Issues
Agriculture Microfinance Overview Part 2-BAARC Thailand
In this video Richard L. Meyer, Professor Emeritus at the Ohio State University talks about Bank for Agriculture and Agriculture Cooperatives (BAAC) Thailand, which is a specialised agriculture lending financial institution within the microfinance sector. Elaborating on BAAC, Richard says that the bank serves both large and small farmers through individual lending and group lending. He also adds that it is very much a specialised bank as the regulations prevent it from lending other than agriculture. Correspondingly, Richard discusses some other microfinance institutions which deliver agriculture lending products.
Agriculture Microfinance Overview Part 1
“In this video Richard L. Meyer, Professor Emeritus at The Ohio State University, discusses the major challenges associated with agricultural credit. Stressing on the need for change in the attitude towards repayment among farmers, Meyer says that the attributes that make financing difficult for agriculture are many such as agriculture clients are geographically disperse, thus, the cost of reaching them is high; agricultural products prices fluctuate thus their ability to repay loan varies and the margin for profit is very low.
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Risks and Challenges in Micro and Small Enterprises Lending
Many Indian microfinance institutions (MFIs) introduced the individual lending (IL) methodology as a natural progression from the group lending methodology. The lure of “big ticket” loans and higher profitability is attracting growth oriented MFIs to aggressively push for IL without considering the inherent risks. IL has its own idiosyncratic needs like cash flow based lending; analysing business needs and risks; bringing flexibility in product features; building staff capacities and processes that must be followed for successful implementation. This IFN examines these issues and makes recommendations for MFIs considering individual lending.
External Framework and the Impact of the Financial Crisis
In this video Roshaneh Zafar, Managing Director of Kashf Foundation, Pakistan speaks about the opportunities and challenges for microfinance in Pakistan. In the context of Pakistan, Roshaneh talks about the strong infrastructure, excellent legislation and a wide network that gives boost to microfinance in the country. She further explain the different business model for clients across the country such as rural integrated programmes, specialised NGO based programmes and microfinance banks. Talking about the challenges, she shares her views on the impact of the financial crisis on microfinance clients, particularly the impact of increased food crises.