In this video series-1, Nobel Peace Prize winner, Dr. Muhammad Yunus, discusses how in times of global financial crisis the poor have proved themselves to be credit-worthy, contrary to the conventional wisdom of large banks. Speaking at the George Washington University in Washington, D.C, Dr. Yunus talks about Grameen’s Microcredit project in New York and how successful the programme became even in the times of global financial meltdown. The video ends with a poignant question by Dr. Yunus, “Who is credit worthy?”
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Are Loan Utilisation Checks Really Necessary?
This note focuses on diverse financial services driven by the diverse needs of people. Typically MFIs provide working capital, which in many cases, are not used as per the stated purposes by the clients. Subsequently, this note questions the necessity of utilisation checks in microfinance service delivery. However, the note also maintains that loan utilisation checks are extremely important for larger individual, enterprise development loans due to its large loan size and sanctioned on the basis of the credit officers’ assessment of the cash flow of that particular business.
The Single Biggest Challenge for Microfinance
The paper highlights the importance of training and capacity building and how it still remains the single biggest challenge in the microfinance sector. The paper stresses that in line with private sector business, MFIs need to start seeing training as an investment rather than expense. To achieve this they need to pay more attention to training and capacity development as a part of an integrated HR management that also includes HR retention.
Apart from this, those financing/ supporting training need to re-assess what they finance and how they evaluate it – to move away from counting “number of attendees” at a training to the “impact of that training” – in terms of changes that occur within MFIs. Also, given the sheer scale of capacity building required, there is a need to use technology and develop new methods of distance and e-learning.
The single biggest challenge for microfinance
The paper highlights the importance of training and capacity building and how it still remains the single biggest challenge in the microfinance sector. The paper stresses that MFIs need to start seeing training as an investment rather than an expense.
Savings Services for the Poor – An Old Need and A New Opportunity for MFIs in India
This note discusses about savings as an important and effective strategy for poor households to avoid potential loss of economic status or independence as a result of a crisis. It also provides a corollary to the theorem “poor cannot save” through various demonstrations in the country; the most successful among these is the SHG Bank linkage. It highlights the legal constraints of the present MFIs in accessing savings services from the clients, and efforts by the regulators in India in this direction such as introduction of Banking Correspondents. The note concludes by highlighting advantages which all – banking institutions, microfinance clients and MFIs would gain due to recommended collaboration between Banking Correspondents and MFIs.
Managing Growth of Microfinance Institutions: ASA Bangladesh – Single-minded growth
This paper is a part of a series of studies undertaken to review the difficulties faced by rapidly-growing MFIs and to examine how they were addressed. It is hoped that this will provide nascent MFIs with a rich understanding of the sort of problems they are likely to face and the range of solutions they might try.
ASA’s growth has taken place over the period during when microcredit service was being rolled out by an increasing number of MFIs to most of the villages and slums of Bangladesh. Besides Grameen and BRAC, no other organisation has ridden the tide of Bangladeshi microcredit as successfully as ASA. This paper describes some of the ingredients of that success – highlighting the key issues faced and strategies adopted by ASA. The paper starts with a statistical review of ASA’s growth and ends with some commentary on what the future may hold.