B. Designing adequate microfinance products and services
Collaboration Between MFIs and Other Actors in Rural Development
In what ways could the MFI collaborate with other actors, such as Farmers' Credit Cooperatives who are closer to the reality of the target group or larger commercial banks?
In many cases MFIs have set up partnerships with a host of different local or international institutions aimed at increasing their outreach in rural areas, having access to larger loan amounts to issue in these areas, or for training/group formation purposes.
Demos for example has liaised with a number of local NGOs in order to identify potential clients. For larger loans, it has partnered with Business Development Service organizations and private sector actors to provide business training and services to its clients (services are either free or factored into loan size). For example, Flag International, a US based consulting firm, is training Demos loan officers in business analysis and agricultural lending.
In Georgia, Constanta and the Microfinance Bank of Georgia (MBG) have formed a partnership, whereby the former transitions its larger clients, who need larger loans than it offers, to MBG, and MBG carries out cash-management functions for Constanta. This is a common form of partnership found in other countries too.
In Kyrgystan, the Kyrgyz Agricultural Finance Corporation (KAFC), has liaised with UNDP Kyrgyzstan for the formation of Self-help groups (SHGs) in the villages (carried out by UNVs and local staff) and for the training of SHGs aimed at graduating them into local level MFIs. |
back to Designing adequate microfinance products and services |
- Sectors for Financing
- Application and Approval Procedures
- Choice of Micro-Finance Products
- Collateral Requirements
- Conditions for Loan Repayment
- Outreach of Micro Finance Services
- Collaboration between MFIs and Other Actors in Rural Development
- Changes in the MFI's Organizational Culture