Tuesday 15th November, 2011
9:00am to 10:30am
This chapter is timely given the current debates in the sector in India, and an increasing industry awareness of the need for client protection and a more deliberate strategy to achieve social performance. The chapter looks at the challenges facing microfinance from the perspective of clients. The challenges are viewed as symptoms of failures to meet the needs of and in some cases harming clients.
Whilst we have seen success in the growth of microfinance in terms of client numbers and the commercial success of MFIs, the chapter focuses on challenges in ensuring that appropriate, quality services are delivered that are valued and create benefits for clients.
Recent events highlight that not all microfinance is the same. The challenge is not just ‘access to financial services’ in the way we might think about access to a new vaccination or drug, but tailoring a range of services delivered in an appropriate way to according to the specific needs of different clients in different contexts. Access is important, but quality of access is key. This includes affordability, convenience, adaptation to needs, and above all a focus on how to create value for clients and avoid harming them.
Based on conversations and input from a range of people in the microfinance community, the chapter will attempt to answer the following questions:
What are the roots of the current problems that we are seeing with overindebtness and other client protection issues in India and other markets? Is this a by-product of the success of the sector and perhaps some over-heating that can be fixed with minor adjustments, or a sign of more fundamental issues? How widespread are these issues?
To what extent do practitioners apply an understanding of clients and their needs in the design and delivery of microfinance? Would an approach that is more responsive to clients and more cognizant of the opportunities to create social value for clients lead to a reduction in the problems we are seeing?
What are the major challenges to the field in terms of client protection and social performance?
What practical measures is the industry taking to allow MFIs to be better informed in relation to these issues and improve practice.
Managing Director, Kashf Foundation, Pakistan
Social Performance Coordinator, FOROLACFR, Bolivia
Director, AEMFI, Ethiopia
Director of Microenterprise Development, USAID, USA
Founder, Imp-Act Consortium, United Kingdom
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