Poverty, Development, Microfinance-an introduction to Microfinace
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Poverty, Development, Microfinance-an introduction to Microfinace

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  • DEMAND-SIDE ISSUES: Who are the poor? People world-wide living on less than US$2/day (using 2005 PPP), with the very poor being taken as those living on less than US$1/day (2005 PPP). South Asia, East Asia and Pacific – over 932 million living under $1.25 a day (US purchasing power parity in 2005) So 66%- 2/3rds of the worlds poor live in our backyard.
  • Outline cash flow patterns amongst rural farming folk – show on white board
  • Poor people save all the time. Savings are often the only way poor people can manage to pay for a major life event, survive a natural disaster, or take advantage of a business opportunity. Life-cycle events (Predictable events) Life cycle events such as childbirth, marriage, and death cause poor people to require larger amounts of cash than are usually available in the household. Many of these needs can be anticipated, but can cause great anxiety. In Bangladesh and India, the dowry system makes marrying daughters an expensive business; in parts of Africa, funerals can be very costly; in many countries, recurrent festivals like Eid, Christmas, or Diwali can also be expensive. Emergencies (Unpredictable events) Emergencies create a sudden and unanticipated need for a larger sum of money than can normally be found at home. Personal emergencies include sickness or injury, the death of a bread-winner or the loss of employment, and theft or harassment; non-personal emergencies include events such as war, floods, fires, and cyclones or hurricanes. Opportunities As well as needs for spending large sums of cash, there are opportunities to do so, such as investing in an existing or new business, or buying land or other productive assets. Source: Stuart Rutherford, “The Poor and Their Money: An Essay about Financial Services for Poor People” (Institute for Development Policy and Management, University of Manchester, January 1999).
  • Poor people save all the time. Savings are often the only way poor people can manage to pay for a major life event, survive a natural disaster, or take advantage of a business opportunity. Life-cycle events (Predictable events) Life cycle events such as childbirth, marriage, and death cause poor people to require larger amounts of cash than are usually available in the household. Many of these needs can be anticipated, but can cause great anxiety. In Bangladesh and India, the dowry system makes marrying daughters an expensive business; in parts of Africa, funerals can be very costly; in many countries, recurrent festivals like Eid, Christmas, or Diwali can also be expensive. Emergencies (Unpredictable events) Emergencies create a sudden and unanticipated need for a larger sum of money than can normally be found at home. Personal emergencies include sickness or injury, the death of a bread-winner or the loss of employment, and theft or harassment; non-personal emergencies include events such as war, floods, fires, and cyclones or hurricanes. Opportunities As well as needs for spending large sums of cash, there are opportunities to do so, such as investing in an existing or new business, or buying land or other productive assets. Source: Stuart Rutherford, “The Poor and Their Money: An Essay about Financial Services for Poor People” (Institute for Development Policy and Management, University of Manchester, January 1999).
  • Two variables can be useful to identify and classify the risks households face: (1) the degree of uncertainty caused by the risk, and (2) the relative size of the loss. The uncertainty of a risk can be thought of in terms of three elements: if the risky event will occur, when it will occur, and how often it might occur. The loss or cost of a risky event can be one-time or ongoing. By positioning the risks faced by households along these two dimensions, it is possible to assess how well various risk management options protect low-income households against each type of risk. Credit and savings products offer low-income households a method for converting a series of small contributions into a large sum of money. Emergency loan funds offered by institutions, such as the Grameen Bank, Shakti Foundation, and Action Aid in Bangladesh, are good examples of providers reducing typical restrictions on credit products to provide more effective risk protection. Flexibility in the loan size and the repayment terms make these institutions’ products responsive to the risk management needs of their clients. However, credit and savings products cannot provide complete protection against risks resulting in a loss greater than what a household can save or repay. As the size of loss increases relative to a household’s expected future income, credit products become increasingly ineffective risk-management tools. Similarly, savings products offer only partial protection against risks causing large losses relative to household income. At this point, insurance becomes a more effective method of risk management. Insurance products aim to protect people from a low probability of catastrophic loss. By pooling the risks of many households, insurance products can potentially offer more complete protection against property, health, death, and disability risks at an annual cost that is within the household’s budget. However, insurance becomes a less effective risk management response as the degree of uncertainty and relative cost associated with a risk reach extreme levels. As a result, most mass, covariant risks, such as epidemics and natural disasters, are difficult to insure. This is especially true if an insurance provider has a relatively small customer base and operates in a contained geographic area. Some mass, co-variant risks can be insured if an insurer spreads the risk among a sufficiently large group of policyholders. By directly offering policies to people over a large, dispersed geographic area , insurers have successfully developed products that protect against natural disasters, such as hurricanes and earthquakes. However, where the expected frequency of occurrence of a mass, covariant risk cannot be reasonably predicted from historical records, or where a risk occurs often in the same region, such as flooding in Bangladesh, insurance will not be an economically viable solution for low-income households. Access to liquid savings deposits and aid from the international relief community are alternative sources for partial coverage against these risks. Source : Warren Brown and Craig F. Churchill, Insurance Provision in Low-Income Communities, Part I, Primer on Insurance Principles and Products (Toronto: Calmeadow, 1999).
  • How can access to financial services help the poor? An understanding of the livelihood context, the resources available, the demands on people’s lives and the strategies they use to manage these, are an important prerequisite that should inform the design of activities that seek to improve livelihoods. It may not always be possible, or appropriate, to attempt to provide the full range of support services required by a community, however it is important to be cognizant of the broader picture to ensure that a key ingredient of the recipe is not being neglected. If we fail to address to a key constraint then the impact of other interventions will be limited. World Ed programs typically have a focus on the human and social dimensions of the livelihoods framework, and to a lesser degree the natural/environmental aspects as well. What this thematic session is presenting are some strategies that can be used to address the financial, and the broader economic needs of the poor together with these other essential ingredients. Ultimately any holistic initiative that seeks to reduce poverty levels should recognize, and if necessary address, the financial and economic needs and goals of the poor. The needs often involve access to appropriate financial services The goals usually revolve around improvement of incomes
  • If we are dealing with the poorest, who are highly vulnerable to periodic financial shocks, such as lack of food, the costs of illness, or an inability to meet other expenditure requirements, then protectional strategies are required. This involves assisting them to develop the assets required to achieve sustainable livelihoods. For these people, access to savings services is most important. Savings, and in some cases small loans that are within the capacity of the borrower to repay, can be used to smooth consumption patterns, in particular during the lean periods experienced by those dependent on seasonal or periodic incomes. Traditional forms of savings such as livestock and grain are useful -but are also highly vulnerable to loss or changes in price. Micro-insurance, be it of health, life or assets, can also protect the poor against sudden loss or misfortune. Money transfer services that are cheap and accessible are particularly useful to poor families who engage in itinerant labour.
  • Promotional strategies, on the other hand, are focused upon increasing incomes. For those who have the skills, confidence, awareness and networks required to engage in productive enterprise, then loans - together with other inputs such as skills training and business support - can enable productive investments that result in increased incomes. This helps people to move along the path from subsistence or income-generating activities to more growth-oriented microenterprises that can lead them out of poverty. This then leads us into thinking about the integration of microfinance with other nonformal education activities in ways that are mutually reinforcing. NFE approaches used to promote financial literacy, economic awareness, social empowerment and health enhance the effectiveness and sustainability of microfinance interventions. Microfinance institutions increasingly recognize their dependence on the health of their clients and their clients’ families, indicating the benefits to MFIs of providing education in nutrition, HIV/AIDS and family planning.
  • Credit often serves the same purposes as savings for poor people, but it is riskier, usually more expensive, and often as unavailable as appropriate deposit services. Poor people often prefer to save and are even willing to pay to do so. Saving money in a safe place provides poor people with a cushion against sudden shocks, such as illness or a bad harvest, which could easily push them into destitution. Savings may in fact be more important than credit in helping the poor to raise incomes and reduce risk, although the impact on income may take longer to realize with savings. Some financial institutions have discovered ways to offer savings products appropriate to the needs of poor people. These institutions have found that demand for savings deposit services far exceeds demand for credit if offered without restrictions or credit-biased incentives. The World Council of Credit Unions (WOCCU) reports that in 2001, 146 popular banks in Rwanda had 274,350 savings accounts and 43,216 borrowers. Approximately two-thirds of its savings accounts were under US$ 22. In many credit unions that have mature savings offerings, net savers outnumber net borrowers by seven to one. (Source: www.woccu.org/development/msb/msb.htm – January 20, 2003). Bank Rakyat Indonesia (BRI) , a profitable financial institution, has shown that rural microfinance can be profitable with attractive savings and credit products, appropriate staff incentives, and an effective system of internal regulation and supervision. As of January 2003, the unit desa system of BRI reported 27.3 million active savings accounts compared to 2.8 million borrowers - net savers outnumber net borrowers by ten to one. (Source: www.bellanet.org/partners/mfn/memberBRI.html, February 2003 )
  • The real beauty of an integrated microfinance plus education approach lies in the mechanism of the savings and credit group meetings. These meetings provide an ideal forum for the promotion of a whole range of NFE messages because: 1. They are regular and intensive 2. They are self-forming, and therefore socially cohesive, providing an ideal learning environment 3. They are sustainable. They are already there and they are not dependent upon project or government funding. This concept is not new, in fact the Grameen Bank pioneered this method with its 16 social messages, and others such as Freedom From Hunger have successfully integrated Microfinance + Education approaches into their programs worldwide. But the fact remains that every day in Cambodia, and almost every other country we are working in, there are hundreds if not thousands of small groups of poor people meeting around savings and credit, and who could also benefit from health and other educational messages. So why not make use of this?
  • Most poor people manage risk with their own means. Many depend on multiple informal mechanisms (e.g., cash savings, asset ownership, rotating savings and credit associations, moneylenders) to prepare for and cope with such risks as the death of a family breadwinner, severe illness, or loss of livestock. Very few low-income households have access to formal insurance for such risks. Prevention and avoidance. When possible, poor people avoid and/or actively work to reduce risk, often through non-financial methods. Careful sanitation, for example, is a non-financial way to reduce the risk of infectious illness, particularly among young children. Using family networks to identify business opportunities is another such mechanism. The imperative to avoid risk often leads to conservative decision making by poor people, especially in business considerations. Preparation . Poor people save, accumulate assets (such as livestock), buy insurance, and educate their children to handle future risks. For certain risks, informal community systems (e.g., Ghanaian burial societies) offer protection. However, such systems generally do not adequately protect against costly and unpredictable risks, such as the debilitating illness of a family income earner. Formal insurance products are beginning to be offered to low-income markets, such as simple credit life insurance (which covers an outstanding loan balance in the event of a borrower’s death), but these insurance products sometimes appear to be designed to protect the lending institution rather than its clients. Coping . Ex post coping can result in desperate measures that leave poor households even more vulnerable to future risks. In the face of severe economic stress, poor people may take out emergency loans from moneylenders, microfinance institutions (MFIs), and/or banks. They may also deplete savings, sell productive assets, default on loans, and/or reduce spending on food and schooling. In general, prevention and planning are far less costly than coping strategies for the individual.
  • Like savings, direct provision of insurance services requires significant skills and systems, as well as institutional permanence. For this reason, NGOs may best serve poor households by helping them gain access to the services of strong and established insurance companies. Donors may be able to play a brokering role in linking insurance companies to MFIs. For example, FINCA, an NGO operating in Uganda, acts as an agent for a formal healthcare plan in order to bring health insurance to FINCA’s clients. Insurance is a weak instrument for addressing community-wide risks (such as areas of high risk of natural disasters) or predicted outcomes (populations suffering from HIV and AIDS) Insurance [1] involves pooling risk (uncertain and expensive losses) over a large number of similar units, such as households, persons or businesses. It means exchanging the uncertain prospect of large losses for the certainty of small regular premium payments. In doing so, policyholders pay for the losses incurred by others (through pooling risk) and for the costs and risk assumed by the insurer. [1] From: “Providing Insurance to Low-Income Households, Part I: A primer on Insurance Principles and Products”, by Warren Brown and Craig Churchill, Calmeadow-USAID Microenterprise Best Practices, November 1999. MicroSave Africa Case Studies on Micro-Insurance, http://www.microinsurancecentre.org/
  • Based on both empirical studies & client satisfaction surveys, and on personal experience.
  • Separate media file
  • Interest rate restrictions: will it be possible to operate sustainably? Why are these restrictions in place? How are they calculated? Are they enforced? Poverty levels includes understanding capacity for debt by target clients. This is not the same as the need (often from the stated desire) for credit, and must take into account the ability of clients to repay loans, as well as the timing and cyclical nature of income and expenditure patterns, which should be assessed on the basis of cash flows.
  • Typi

Poverty, Development, Microfinance-an introduction to Microfinace Poverty, Development, Microfinance-an introduction to Microfinace Presentation Transcript

    • Poverty, Development & Microfinance: Nexus, Praxis and the Internet
    • An Introduction to Microfinance
    • Guy Winship
    • Global Leadership Program, Macquarie University
    • Tuesday 11 th May 2010
  • OVERVIEW
    • Demand side issues: who are “the poor”?; how many of them are there?; why do poor people in developing countries need financial services? And what type of financial services do they need?
    • Supply-side issues: How to best provide financial services to the poor? Who is best placed to provide these services? What are the costs and risks involved in providing such services?
    • Use of the internet (Kiva & Good Return): how it (generally) works; does this link supply & demand? What are the costs & risks? Are there any transparency issues?
    • DISCUSSION & QUESTIONS
  • THE WORLD IS POORER THAN WE THOUGHT – THE WORLD BANK
  • MICROCREDIT & MICROFINANCE
    • Microcredit means providing poor people with very small loans. They may use these loans to help them engage in productive activities or grow their small businesses, or they may use them for their consumption needs (such as a wedding, housing improvements, school fees or food).
    • The term microfinance is used to cover the broader range of financial services, including savings, loans, insurance and transfers of money. “Micro” simply refers to the size of the amounts involved.
  • HOUSE-HOLD INCOME & EXPENDITURE PATTERNS
    • Typical activities in the poorest areas of Asia
    • Seasonality
    • Vulnerability to economic shocks – how to protect from these shocks?
    • Potential to raise income – how to promote livelihood development?
  • FINANCIAL EXPENSES Life Cycle Events
    • Birth
    • Food and clothing
    • Education
    • Marriage
    • Funeral
    • Recurrent festivals
    Emergencies Investment Opportunities
    • Small business investments
    • Purchasing land and other productive assets
    • Home improvement
    • Sickness
    • Injury
    • Theft
    • Natural disasters
  • HOW DO PEOPLE PAY FOR THESE EXPENSES?
    • Through savings :
    • Money in bank
    • Money at home
    • Rotating credit
    • Animals
    • Jewelry / assets
    • Through Insurance :
    • of Life and health, of livestock and crops,
    • of home and other assets
    • Through loans
    • From banks
    • From relatives
    • From money lender
    • Through Payments:
    • Usually from relatives working ion another city or country;
    • 3 main issues are: Safety; Cost; & Speed.
  • DIFFERENT FINANCIAL SERVICES FOR DIFFERENT RISKS Very Large Small Certain Highly Uncertain Degree of Uncertainty Relative Loss / Cost Life Cycle Events Death Disability Health Property Mass, Co-variant Source : Warren Brown and Craig F. Churchill, Insurance Provision in Low-Income Communities, Part I. Flexible Savings and Credit Insurance Flexible Savings Partial protection
  • The use of microfinance as a strategy to overcome poverty Physical Capital Natural Capital Financial Capital Social Capital Human Capital Sustainable Livelihood
  • ADDRESSING FINANCIAL NEEDS: PROTECTIONAL STRATEGIES FOR THE VULNERABLE POOR
    • Access to safe savings services is of prime importance - this enables consumption smoothing
    • Savings, small loans, insurance and remittance services can provide protection against financial shocks
    • Solidarity group activities increase the social capital of vulnerable people
  • FINANCIAL NEEDS: PROMOTIONAL STRATEGIES FOR THE ECONOMICALLY ACTIVE
    • Access to appropriate financial services, together with training and business support, assists people in the transition from traditional subsistence or income-generating activities to more growth-oriented microenterprises
    • NFE approaches to financial literacy, economic awareness and social empowerment enhance the effectiveness and sustainability of MF activities
    • MFIs depend upon the health of their clients for their own viability
  • WHY ARE SAVINGS AS IMPORTANT AS CREDIT?
    • Credit is a useful way to save but can be expensive, inflexible and inaccessible
    • Saving safely provides poor people with a cushion against shocks
    • Saving may be more important than credit in helping raise incomes and in reducing risk
    When poor people have a choice, they choose to save far more often than they choose to borrow
  • INTEGRATING MICROFINANCE AND EDUCATION
    • Savings and credit group meetings provide an ideal venue for promoting educational messages because they are:
    • Regular – usually meeting weekly, fortnightly or monthly.
    • Self-forming – and therefore contain elements of trust, solidarity and social cohesiveness.
    • Sustainable – because clients attend out of self-interest. They are not dependent upon project or government funding.
  • HOW DO POOR PEOPLE PROTECT THEMSELVES FROM RISK? Preparation Coping Prevention and Avoidance
    • Careful sanitation, for example
    • Identifying business opportunities
    • Saving
    • Accumulating assets (e.g. livestock)
    • Buying insurance
    • Educating children
    • Taking emergency loans
    • Depleting savings
    • Selling productive assets
    • Defaulting on loans
    • Reducing spending
  • OTHER MICROFINANCE SERVICES
    • Insurance - direct provision of viable services is complex. May be better to link poor clients with existing providers.
    • Transfer payments / remittances – fast and cheap remittance services are particularly valuable for those whose family members engage in migrant labour
    Health Insurance For FINCA’s Clients FINCA, an NGO operating in Uganda, acts as an agent for a formal healthcare plan to bring health insurance to its clients.
  • WHAT FINANCIAL SERVICES POOR PEOPLE WANT (IN ORDER OF PRIORITY)
    • 1. Security of savings
    • 2. “Good” access to savings and loans
      • Convenient location
      • Convenient times
      • Minimal paperwork
    • 3. Appropriate design
    • Regular, small deposits / payments
    • Small variable amounts
    • Quick access
    • 4. “Good” interest rates (more on this later)
    • So, what are the Problems and risks in accessing financial services for poor households?
    • Traditional financial institutions not aimed at the poor – why not?
    • Savings:
    • Money in bank – may be difficult to access
    • Money at home – risk of theft, easy to spend
    • Rotating credit – rigid amounts and timing
    • Animals – risk of death, sickness, have to convert to cash , change in value
    • Jewelry/assets – risk of theft or loss, have to convert to cash, change in value
  • PROBLEMS AND RISKS FOR POOR HOUSEHOLDS CONT’D
    • Loans
    • From banks – can be difficult to access, difficult procedures, collateral requirements, credit history
    • From relatives – not always available
    • From money lender – expensive, not always available
    • Insurance
    • Limited availability and access
  •  
  • SUPPLY-SIDE ISSUES
    • Why use of microfinance institutions is best: sustainability & outreach
    • Three main costs / risks faced by financial institutions:
      • Cost of delinquency – losses arising from loans not being repaid
      • Transaction costs – the expenses incurred in providing products & services
      • Cost of capital – costs associated with funding (e.g. savings, wholesale finance, equity, securitisation etc)
    • Each of these has implications in the microfinance context
  • INTEREST RATES
    • Sustainability in the provision of services to large numbers of poor only possible if income covers costs
    • Equity in access also an issue
    • Costs for microfinance institutions are based on same three legs as other financial institutions, but MFIs costs differ from those of commercial banks, especially with regard transaction costs
    • Access main issue, so usually need to compare with rates of village money-lenders
    • Affordability & rates of return on SMMEs
    • Institutional efficiencies and interest rates
  • USING ITS CAPITAL, A BANKING INSTITUTION CAN BORROW TO ACQUIRE ASSETS, INCLUDING LOANS TO CLIENTS. THE BALANCE SHEET SHOWS HOW THIS IS DONE… Savings Debt Other people’s money “ Our” money Performing assets Other Assets Assets = Liabilities + Net worth (Capital)
  • EXAMPLE OF INTEREST SENSITIVITY Balance Sheet: ASSETS Loans $1,000,000 LIABILITIES Savings $ 600,000 EQUITY Owners/members shares $ 400,000
  • EXAMPLE OF INTEREST SENSITIVITY CONT’D
  • EXAMPLE OF INTEREST SENSITIVITY CONT’D
  • SUPPLY-SIDE ISSUES: INSTITUTIONAL ASPECTS
    • Understanding the country context:
      • Legal: mainly interest rate restrictions, government support, and contractual enforcement
      • Financial sector regulation and supervision:
        • Need for regulation
        • Costs of supervision & being supervised
      • Economic and social environment:
        • Economic stability
        • Poverty levels
        • Government policies
  • INSTITUTIONAL ASPECTS CONT’D
    • Client tracking and Impact assessment:
      • Quantitative & qualitative approaches
      • Need to ensure positive change in lives of beneficiaries
      • Ensure targeting poorest – danger of “Mission drift”
      • “ Double” & “triple” bottom line reporting
    • Risks facing MFIs:
      • Delinquency risks
      • Management / governance & operational risks
      • Liquidity risks
      • Interest rate & foreign exchange risks
      • Environmental risks, some common with clients
  • WHAT CAN MICROFINANCE OFFER?
    • Sustainable services
    • Products that are appropriate to the needs of clients
    • Flexible responses
    • Local ownership and/or control of resources
    • How?
    • Usually through mobilization of savings and credit groups whose members guarantee each other’s loans. This reduces costs and risk to the lender.
    • A range of models exist
  • MICROFINANCE MODELS
    • Main distinction in approaches is between minimalist versus integrated models; should the agency provide financial services only, or should these provided together with other services?
    • Minimalist models:
      • Main advantages are:
        • Increased efficiencies (viz lower cost to income ratio)
        • Improved effectiveness (greater & longer-lasting impacts on client beneficiaries)
        • Better risk management
        • Often a requirement by regulatory authority
      • Main disadvantages:
        • Ignores other needs of clients
    • Integrated models:
      • Main advantages:
        • More holistic developmental approach, recognises diverse needs of clients
      • Main disadvantages:
        • Often has negative affects on delinquency
    • Which approach works better depends on context & situation
    • Within minimalist approach there are various models that are typical…
  • TYPICAL MICROFINANCE MODELS
    • Microfinance institution model
    • A credit officer from the institution visits a village, collects individual’s savings and distributes their loans through solidarity groups, mutual guarantees apply.
    • + good management systems
    • + can leverage external resources
    • requires suitable regulatory environment
    • not usually owned by clients
  • TYPICAL MICROFINANCE MODELS
    • Village bank model
    • A microfinance institution lends to a village bank. The village bank on-lends to individuals in the village according to its own rules and regulations.
    • + lower costs than MFI model
    • + can leverage external resources
    • + local ownership and control (with support)
    • - Requires regulatory framework for MFI and village bank regulation
  • TYPICAL MICROFINANCE MODELS
    • Cooperative or self-help group model
    • A local organisation is formed around savings and credit, it collects savings from its members and on-lends to its members. It may or may not have solidarity groups and mutual guarantees.
    • + local ownership and control
    • + all profits stay in the group
    • management capacity a big problem
    • May not be able to access external resources
  • CLIENT EMPOWERMENT & DISCIPLINE & RELATIONSHIP WITH NGO
    • Whichever model is used Client discipline is important…simply in that poor people must take responsibility for their decisions, agreeing to and making on-time payment of principal and interest sufficient to cover the full cost of service. Without client discipline no microfinance program will be sustainable.
    • In practice this also means that clients are treated with respect, and often changes the relationship between the development agency and the client different from that in other developmental sectors: “client” versus “beneficiary”
  • 5 PRINCIPLES OF SUSTAINABLE MICROFINANCE
    • Products and services must fit the needs and preferences of the clients
    • Streamline operations to reduce costs
    • Interest rates and fees must be able to cover all of your costs
    • Structure the program so that clients are motivated to repay loans
    • Promote institutional sustainability through capacity building
  • SELECTED ISSUES IN MICROFINANCE
    • Funding: use of the internet in providing capital for micro-credit – examples of www.Kiva.org and www.GoodReturn.org .
      • What do you think of these programs?
      • What do lenders think of these programs? Why?
      • What do borrowers think of these programs? Why?
    • If time, can also discuss:
    • Over-indebtedness: what level of indebtedness is appropriate? How much debt is too much? Why?
    • Interest rates: what level of interest rates is appropriate for low income borrowers? Why?
    • Savings: do you agree poor people can save? Should they? Why?
  • SUMMARY
    • Everyone needs access to financial services – even the very poor.
    • Savings are the most important service for most low income people.
    • Credit is not for everyone. People must be able to repay.
    • There are a range of MF models that can be used to provide these services, but need a supportive regulatory environment
    • Microfinance alone is not enough, the poor need a range of support services.
    • Internet provides opportunities to raise capital and to educate people on poverty issues
  • READINGS & REFERENCES:
    • The Poor And Their Money by Stuart Rutherford, Oxford University Press, 2000
      • A good introduction to microfinance & an easy read.
    • Sustainable Banking With The Poor: Microfinance Handbook by Joanna Ledgerwood, The World Bank, 1999
        • A more detailed overview of the operation, methodologies, costs, risks and issues in providing microfinance services and products.
    • The Challenges of Market–led Microfinance by Guy Winship, Practical Action Publishing, 2007
    • Written as a conversation with practitioners, this book discusses the issues facing microfinance institutions from an organisational and practitioner perspective.
    • Various websites: list at www.cgap.org and www.worlded.org.au
  • THANK YOU! DISCUSSION – Q & A