A decade ago it seemed clear that it was only a matter of time before mobile payments and mobile banking became a major part of the way in which poor people received financial services. This Briefing Note considers some of the key developments. Providing that a dominant and interoperable transaction infrastructure emerges, there should be major opportunities for MFIs to re-engineer business process to reduce costs using the capabilities of mobile payment platforms. This is already happening in the Philippines, and in Kenya.
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Microfinance – Time to Get to Back to Basics?
The rapid growth of the microfinance sector in the last few years has completely changed its complexion and nature. Detractors of typical ‘Grameen’ replicators have been saying for a while that high rates of growth have led to mono-products and multiple lending to a vulnerable section of the population. Overall, the need for microfinance in India cannot be understated and the role of private sector microfinance whether in ‘for-profit’ or ‘not-for-profit’ formats will remain. However, any business which forgets its client cannot have a bright future.
Compartamos Controversy Leadership and Responsibilities Part 3
In this video Richard Rosenberg, consultant to CGAP, discusses the details behind Compartamos Controversy. He explains why profit was necessary to attract investors and what factors led to the controversy. In retrospect, he also reflects on what could have been done to avoid the crisis. Compartamos Bank Mexico is one of the leading MFIs in Latin America.
State of Microfinance in India 2010
This note provides a quick overview of the key issues and challenges facing India microfinance as of March 31st, 2010. It highlights the remarkable growth of the microfinance industry as well as its commercialisation over the last 3-4 years. The note also examines the importance of offering a diverse range of financial services; the potential of m-banking and the banking correspondent model for inclusion; and for assessing social performance management in a meaningful manner.
Compartamos Controversy Leadership and Responsibilities Part 2
In this video Richard Rosenberg, consultant to CGAP, discusses the interest rate debate in the microfinance sector and what role it played in Compartamos Bank Mexico controversy – one of the leading MFI in Latin America. He also explained the institutional arrangement of Compartamos that governed the money flow. Explaining further, Richard says the political and general view on interest rate makes microfinance institutions vulnerable to fixing higher interest rates. Sharing the events in India where microfinance managers were publically criticised over interest rates, Richard says interest rates is a sensitive subject when it comes to microcredit.
Diagnosing Financial Stress in Group Methodology
The recent past has seen instances in the south of India where groups refuse en masse to repay, which has, unsurprisingly, challenged MFI operations. The reasons for this are many, including the competitive environment, multiple borrowing, the perceived threat from MFIs to the SHG movement and the increasing attention being focused on the sector. This focus note presents the learning from a study conducted by MicroSave in collaboration with Grameen Koota to look at the group lending methodology and assess the drivers of financial stress in the kendras, and if/how this can be diagnosed.