In the words of NABARD, “internal savings mobilized by its members is the core of the SHG”. Banks size their loans to SHGs as a multiple of the savings accumulated. Strangely though, it is not routine for banks to verify SHG balance sheets before lending. Few SHGs try to balance their books, and even fewer have provisions for audits.
In the SHG-bank linkage model, the size of bank loans is determined by the size of the SHG corpus, more than by any other single factor. As a result, SHGs face very strong systemic incentives to neglect errors that overstate their collective savings or understate losses.
UNCDF SHIFT commissioned MSC to conduct a study on the status of digitization in the microfinance sector in Bangladesh. Along with the interventions that MFIs will undertake, the sector also needs policy-level changes that enable the digitization of microfinance institutions. This policy brief presents the challenges that the microfinance sector in Bangladesh faces and interventions that would create an enabling environment for digital transformation.
Developing micro-insurance ecosystem in Mozambique
The insurance industry and the culture of insurance in Mozambique are in an evolving stage. Given the current state of micro-insurance in Mozambique, it is very essential to have a focused approach towards developing an enabling ecosystem in Mozambique.
At MSC, our mission is to allow millions of people to get access to financial and social services. Our key impact has been in uncovering the importance of the unique needs of the poor and those who remain financially and socially excluded. As we advance the agenda of financial inclusion, we bring client-centricity to debate in the development finance. Our work results in high quality, affordable, market-led solutions to millions of people across developing markets. Watch what our experts have to say about MSC’s key impact.
At MSC, we never stop exploring. From agriculture to digital platforms, such as AI and blockchain, we are in constant pursuit of new spaces to work in. This video explores some of the newest and most exciting areas that we have been working in on our recent engagements.