FIGHTING AGAINST OVERINDEBTEDNESSGlobal Microfinance Forum 2012İstanbulBurcu Güvenek ARASLISenior Development Finance Expert
2                                        Access to Finance is a Human RightA chain is no stronger than its weakest link  W...
3                                    Access to Finance is a Human RightThe Definition in Microfinance ContextImpact Approa...
4                                                      Access to Finance is a Human RightOver Indebtedness;An Old Wine in ...
5                                     Access to Finance is a Human RightMyth or Fact?• Does Commercialization a Hidden Bes...
6                                         Access to Finance is a Human RightThe Resolution • As sure as eggs is eggs ;   ▫...
7                                           Access to Finance is a Human RightThe ResolutionEveryone/all Stakeholders Have...
8                                     Access to Finance is a Human RightEvery Cloud Has a Silver Lining..Introduction to P...
9                     Access to Finance is a Human RightThank You for Your Attention
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Fighting Against Over Indebtedness Burcu Arasli Gmf 2012

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Fighting Against Over Indebtedness Burcu Arasli Gmf 2012

  1. 1. FIGHTING AGAINST OVERINDEBTEDNESSGlobal Microfinance Forum 2012İstanbulBurcu Güvenek ARASLISenior Development Finance Expert
  2. 2. 2 Access to Finance is a Human RightA chain is no stronger than its weakest link Why Over Indebtedness Matter This Much for Microfinance Socially ; challenge to the infamous notion of the double bottom-line Financially ; challenge to financial and operational sustainability
  3. 3. 3 Access to Finance is a Human RightThe Definition in Microfinance ContextImpact ApproachA microfinance customer is over-indebted if he/sheis continuously struggling to meet repaymentdeadlines and repeatedly has to make unduly highscarifies to meet the obligations..
  4. 4. 4 Access to Finance is a Human RightOver Indebtedness;An Old Wine in New Bottle.. Outside Influences  External Shocks, Macro economic instability  Lack of Credit Bureaus; A-symmetric information Lender Behavior  Aggressive Growth  Product Design  Limited Awareness of Microfinance Plus  Lending Methodologies Borrower Behavior  Low financial literacy  Cognitive and Psychological Biases  Sociological Influences  Socio-demographic and Economic Characteristics
  5. 5. 5 Access to Finance is a Human RightMyth or Fact?• Does Commercialization a Hidden Best for Microfinance?• Is Competition Really Good for Borrowers?• Consumer Loans Need and Risks Related• ‘’Over Indebtedness is not generally related to insufficient information’’ Wrong but……• Early Warning Systems, Are we There Yet• ‘’You can lead a horse to water but you cant make him drink’’: Degree of Regulation & Supervision and the Need for the State of Industry
  6. 6. 6 Access to Finance is a Human RightThe Resolution • As sure as eggs is eggs ; ▫ Just like microfinance is not a miracle tool to eradicate global poverty alone, there is no one size fits formula to prevent over indebtedness. ▫ Microfinance is extremely local and influenced by diverse social, physiological and demographic factors. Even more factors differ from region to region rural vs. urban lending in one country. ▫ Everyone/all stakeholders have a role in preventing over indebtedness
  7. 7. 7 Access to Finance is a Human RightThe ResolutionEveryone/all Stakeholders Have a Role inPreventing Over Indebtedness Investors MFIs Building Synergic Local Level Microfinance Strategy Donors/International Government Development Agencies
  8. 8. 8 Access to Finance is a Human RightEvery Cloud Has a Silver Lining..Introduction to Principles for Investors inInclusive finance Range of Services Client Protection Fair Treatment Responsible Investment Transparency Balanced Returns Standards
  9. 9. 9 Access to Finance is a Human RightThank You for Your Attention

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