Conference Resources
Resources from CGAP
Too Much Microcredit? A Survey of Issues and Evidence on Over-Indebtedness among Microborrowers This paper is written primarily for microlenders and the institutions that fund them. We examine conceptual issues and the limited empirical evidence about over-indebtedness in microcredit markets.
Credit Reporting at the Base of the Pyramid: Key Issues and Success Factors Over the past five years, the microcredit sector has experienced unprecedented growth. The number of borrowers served by microfinance institutions (MFIs) has increased threefold to reach 120 million clients.
Responsible Finance: Putting Principles to Work In this paper, we define what we mean by responsible finance, both as an end-state vision and in terms of a pragmatic focus on client protection and social performance management to help achieve our goal. This paper explores the state of responsible finance knowledge and practice, with a focus on three mutually reinforcing client protection strategies.
The Role of Funders in Responsible Finance This Brief addresses the recent movement toward responsible finance, which has shaped the industry's belief that financial service providers have a responsibility to deliver financial services in a way that is transparent, fair, safe, and likely to generate benefits for poor clients.
Andra Pradesh 2010: Global Implications of the Crisis in Indian Microfinance The crisis that erupted in the Indian State of Andhra Pradesh in early October 2010 hit at the epicenter of microfinance in India and has implications there, across the country, and globally.
Growth and Vulnerabilities in Microfinance This Focus Note distills lessons from four microfinance markets that have all experienced a repayment crisis after a period of high growth.
Indian Microfinance Goes Public: The SKS Initial Public Offering On 28 July 2010 SKS, India’s largest MFI with 5.8 million clients, became the first MFI in India to float its shares through an initial public offering (IPO).
Incorporating Consumer Research into Consumer Protection Policy Making This Focus Note describes CGAP's experience to date gathering qualitative and quantitative information directly from low-income consumers to inform financial consumer protection policy.
Consumer Protection Regulation in Low-Access Environments: Opportunities to Promote Responsible Finance Responsible finance is much in the news these days, as the fallout from irresponsible financial practices and products in the United States and other developed markets continues to affect global finance.
Implementing the Client Protection Principles: A Technical Guide for Investors, 2nd edition This second edition reflects the developments in implementation and practices of the Client Protection Principles into investors’ policies and processes over the past year.
Richard Rosenberg on over-indebtedness CGAP senior advisor Richard Rosenberg talks about what he considers to be the biggest challenge facing the microfinance industry today: defining and "getting a handle" on the levels of over-indebtedness experienced by poor people around the world.
Shodh Yatra: an Indian microfinance journey This film follows Vijay Mahajan on the final days of his journey through India exploring the lives and livelihoods of the poor. Vijay has been on the front lines of the battle in Andhra Pradesh. His journey by foot, public transport, and by car took him across five thousand kilometers of India to meet and talk to poor borrowers, and get the real, grassroots-level answer to an existential question: has microcredit been good for the poor or bad? In this film, we accompanied him on the final days of his journey, through Andhra Pradesh.
Resources from IFMR
Impact Evaluation of Micro Credit in Urban India Is microfinance the silver bullet to poverty alleviation? Preliminary results from the first randomized control trial uncover both intuitive and surprising impacts.
How do Microfinance clients understand their loans? This paper explains how MFI clients perceive their loan contract and its implications for policy. In recent years, discussions on microfinance policy in India have centered on the extent to which small borrowers understand their loans and the financial liability implicated therein.
Access to Finance in Andhra Pradesh In this report, we present results from the fi rst ever household survey on access to fi nance in India which includes information on micro finance, is representative of an entire state’s (Andhra Pradesh) rural population, and for which the data is publicly available.
Resources from MicroSave
Dropouts and Graduates: What Do They Mean For MFIs? This note explores dropouts and graduates and their significance for MFIs.
Breaking the Barriers: Market Expansion through Individual Lending The Note with the help of case studies explains the way individual lending can help MFIs in diversification of portfolio at risk and cross-selling of other financial products. The Note further explains the challenges faced while targeting the group clients for individual lending and also discusses the challenges faced while getting fund support from the banks.
A Closer Look at Multiple Borrowing in the Philippines With increasing cases of over-indebtedness among microfinance clients, multiple borrowing is getting its share of unfavourable limelight. Multiple borrowing brings many benefits to clients, but too much can also bring problems. In this Note, we present summary results of a study which looked at this phenomenon in the Philippines.
The Credit-Deposit Ratio – Time for a Re-Think? This note provides a critique of CDR as a yardstick of measuring bank commitments for serving the poor, instead it suggests to develop an alternative measure that calculates credit as per utilisation, which gives a far better picture of credit usage.
Are Loan Utilisation Checks Really Necessary? This note focuses on diverse financial services driven by the diverse needs of people. Typically MFIs provide working capital, which in many cases, are not used as per the stated purposes by the clients. Subsequently, this note questions the necessity of utilisation checks in microfinance service delivery. However, the note also maintains that loan utilisation checks are extremely important for larger individual, enterprise development loans due to its large loan size and sanctioned on the basis of the credit officers’ assessment of the cash flow of that particular business.
Challenges of Introducing Individual Lending in India Individual Lending in the context of Indian microfinance is still at a nascent stage thereby providing scope for expansion. This note discusses some of the key challenges faced by MFIs implementing individual lending model.
Why do Microfinance Clients Take Multiple Loans? This Focus Note (a) presents the rationale and impact for multiple borrowings from a client perspective; and (b) discusses how the MFI and its leaders perceive the issue and its implications.
Risks and Challenges in Individual Lending Many Indian MFIs introduced the individual lending (IL) methodology as a natural progression from the group lending methodology. The lure of "big ticket" loans and higher profitability is attracting growth oriented MFIs to aggressively push for IL without considering the inherent risks. IL has its own idiosyncratic needs like cash flow based lending; analysing business needs and risks; bringing flexibility in product features; building staff capacities and processes that must be followed for successful implementation. This note examines these issues and makes recommendations for MFIs considering individual lending.
Microfinance In India: Built On Sales Targets or Loyal Clients? Strong relationships and in-depth understanding of the needs of clients are key to addressing the problems of multiple borrowing and over-indebtedness. MFIs will need to diversify the range of services they offer to encompass insurance, savings and even remittance services - probably through m-banking platforms.
The Andhra Pradesh Crisis: Three Dress Rehearsals … and then the Full Drama In the four years prior to the Andhra Pradesh crisis, Indian microfinance had three dress rehearsals for the final drama now unfolding. In Indian microfinance circles, these are known as the "three Ks" and each provided an important lesson and warning for the Indian microfinance industry. This note explores these and critically examines the responses of the microfinance industry.
The Andhra Pradesh Crisis: So What Next? Clearly the microfinance, or better said "microcredit", industry in India is undergoing a major shake-up. This note examines the nature of the shake-up and likely consequences including interest rate caps, sources of capital, equity valuations and the worst case scenario.
The Andhra Pradesh Crisis: What Should MFIs Do? This note examines how the Indian MFIs should respond to save their industry - denial is no longer an option. It examines how MFIs need to improve transparency of interest rates, governance and operations; as well as analysing and documenting their social performance management. It looks at the role of a credit bureau and concludes that ultimately, MFIs will have to move towards 3rd generation microfinance, probably on the mobile money platforms.
The Andhra Pradesh Crisis: What Should The Government Do? This note examines what the government should do in the wake of the Andhra Pradesh Crisis. It highlights that first and foremost, the government should recognise that the MFIs have provided valuable credit-led financial inclusion, and that the SHG movement is not a panacea.
The Andhra Pradesh Crisis: Clients' Perspective This Note focuses exclusively on clients’ perspectives, before and after the crisis, gathered by the MicroSave team at various points of time, in a wide variety of locations, across Andhra Pradesh, after the crisis broke in October 2010.
The Collection Methodologies in Group Lending This Note describes and compares the three most commonly practiced instalment collection methods in group lending. It then highlights that MFIs now have the opportunity to partner with banks as their banking correspondents and that this provides unprecedented opportunities to make instalment collection more efficient and client-responsive.
Diagnosing Financial Stress in Group Methodology This focus note presents the learning from a study conducted by MicroSave in collaboration with Grameen Koota to look at the group lending methodology and assess the drivers of financial stress in the kendras, and if/how this can be diagnosed.
Client Drop-outs From East African Microfinance Institutions The document synthesizes the country studies conducted in Kenya, Tanzania and Uganda and examines why MFIs in East Africa suffer such remarkably high levels of drop-out amongst their clients. The study also seeks to improve understanding of why the current systems and services being provided by the MFIs appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Client Exits (Drop-outs) Amongst Tanzanian Microfinance Institutions The paper examines why the MFIs in Tanzania suffer such remarkably high levels of drop-out amongst their clients. The field study also seeks to improve understanding of why the current systems and services being provided by the MFIs appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Drop-outs Among Selected Zambian MFIs: Causes And Potential Impact On Product Design Examines why the MFIs in Zambia suffer such remarkably high levels of drop-out amongst their clients. The field study also seeks to improve understanding of where/if the current systems and services being provided by the MFIs are failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Drop-outs Among Ugandan Microfinance Institutions The document examines why the MFIs in Uganda suffer such remarkably high levels of drop-out amongst their clients. The field study also seeks to improve understanding of why the current systems and services being provided by the Microfinance Institution's appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Drop-outs Amongst Kenyan Microfinance This paper examines why the MFIs in Kenya suffer such remarkably high levels of drop-out amongst their clients. The field study also seeks to improve understanding of why the current systems and services being provided by the MFIs appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Drop-outs and Graduates – Lessons from Bangladesh The paper examines why the MFIs in Bangladesh suffer high drop-out amongst their clients. The study also seeks to improve understanding of why the current systems and services being provided by MFIs appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of clients, and draws lessons for MFIs that wish to effect change.
Dropouts in Northern Province, South Africa The paper examines why two MFIs in north eastern South Africa suffer such remarkably high levels of drop-out amongst their clients. The field study also seeks to improve understanding of why the current systems and services being provided by the MFIs appear (on the basis of these drop-out rates) to be failing to meet the needs and demands of the clients, and draws lessons for MFIs that wish to effect change.
Drop-Outs, Graduates, Defaulters and the Excluded There is compelling evidence to support the contention that a significant majority of “drop-outs” occur because MFIs' financial services are inadequate or inappropriate to meet the needs of the clients they are trying to serve. This document reviews four such issues facing MFIs worldwide, with evidences drawn primarily from Bangladesh, the cradle of group-based lending.
MFP 011. Dick Turner: “Tricks of the Trade” Underwriting Loans. Part 3 Dick Turner, former Chief Credit Officer, ShoreBank, shares his general observations about underwriting loans. Dick Turner has been involved in making loans and training credit staff for well over 30 years. Much of that experience was spent in the United States but also in a number of other countries, primarily in Eastern Europe.
MFP 015. Equity Bank: Effective Monitoring Practices Watch the examples of various ways to monitor a loan. Listen to Equity Bank loan officers and credit administrators talk about their most effective practices of monitoring loans.
MFP 018. Individual Lending: Steps of Managing Loan Delinquency From making a warning phone call to starting a repossession process – in this episode we discuss the typical steps of managing a delinquent loan.
MFP 019. Dick Turner: Problem Loans. Part 1 Dick Turner, former Chief Credit Officer, ShoreBank, shares his observations of psychological aspects of managing problem loans and treating them as a learning experience.
MFP 020. Dick Turner: Problem Loans. Part 2 Dick Turner, former Chief Credit Officer, ShoreBank, shares his observations of psychological aspects of managing problem loans and treating them as a learning experience.
