This note highlights the key benefits which Loan Portfolio Audit (LPA) has produced and has been prepared with the objective of further promoting its adoption amongst Indian MFIs. The note mentions the points which helped the MFIs which opted for LPA in India. Some of the benefits are—pin-pointing gaps in policy and procedure and solutions for these, identifying internal audit and control system risks and ways of reducing these, solving gaps related to MIS, supplementing rating reports, establishing transparency and enabling fund raising. However, the note reminds of the fact that LPA is primarily a diagnostic tool used to help MFIs target capacity building/institutional strengthening efforts and it does not use the findings to judge the quality of an MFI
Blog
Establishing a Credit Administration & Control Unit
Credit administration and credit controls are the two key components in the active management support of the frontline credit processes of making individual loans and client management. This note demonstrates the ways to organise a Credit Administration Unit (CAU), when an organisation grows in terms of volume and outreach. Contextualising the growth scenario, the note outlines regulatory requirements and geographical expansion as key reasons that lead to implementation of credit administration and control. It highlights the essential components of a lending institution’s credit roles and summarises factors for right credit administration and controls. The note also puts forward the staffing pattern and delves into roles and responsibilities of the staff in CAU.
Microfinance Is Not An Easy Business!
This focus note journeys through the emergence, history and present status of microfinance in India. It discusses the various stages of evolution while highlighting key challenges of each stage. It pinpoints the issues related to transaction costs of delivering microfinance services in Andhra Pradesh and their impacts. It gives lessons relating to resource constraints, transparency, efficiency in operations, and internal and external dynamics to the investors, promoters and to the practitioners in microfinance as well. The note makes a strong case of immense potential the MFIs have in terms of meeting the financial needs of the poor and also maintaining high organisational standards.
Electronic Banking: The next revolution in financial access
This paper highlights the role of e-banking in improving financial access to the poor. It brings forth three major reasons viz. inadequate customer value proposition for the end users, a poorly developed business case for the companies collaborating, and a debilitating environment, responsible (one or all) for successful implementation of e-banking solution. This note concludes with highlighting opportunities for financial institutions and telecommunications companies, regulators’ willingness and understanding the present market demands for enhancing financial inclusion.
Lessons from MicroSave’s Action Research Programme (2006)
This note documents the progress made under the Action Research programme of MicroSave during 2006. It gives lessons which are derived from the applications of MicroSave’s toolkits on strategic planning, branding, risk management, process mapping, credit control and administration, customer service and pilot testing within ARPs. It stresses that market led growth is client responsive and highlights importance of good governance, strong communications, sound growth management, managing mission drift and regular inputs for building capacities.
Electronic Banking: The Next Revolution in Financial Access
This focus note highlights the role of e-banking in improving financial access to the poor. It brings forth three major reasons viz. inadequate customer value proposition for the end users, a poorly developed business case for the companies collaborating, and a debilitating environment, responsible (one or all) for successful implementation of e-banking solution. This note concludes with highlighting opportunities for financial institutions and telecommunications companies, regulators’ willingness and understanding the present market demands for enhancing financial inclusion.