Best Practices and Empowerment

Strategy in Microfinance
• Individual or personal counseling to the clients by
MFI/NGO.
• Designing the income generation activity or business
plan by the client with the active help of MFI/NGO.
• Providing a range of microfinance products to the
clients
• Provision of different lines of same product for
example the credit products like consumption loan,
production loan, microenterprise loan, disaster loan,
short-term loan, long-term loan etc. and the insurance
products like health insurance, agriculture insurance,
life insurance, general insurance, dairy insurance etc.
• Provision of financial and non-financial
products together.
• Integration of various microfinance products
• Partnership and inter-collaboration of MFIs
• Tapping new market segment – focusing from
rural to urban
• Adopting multiple lending models
• Customizing financial products and delivery
systems as per the market demand
 Networking/Outreach of SHGs
• Active attempt to find/interact with clients in
selected populations, geographic catchment
area or targeted initiatives.
• The cost of operations of MFIs depends upon
the level of outreach.
• The cost of fund, operating cost and bad debts
decreases when the number of clients
increases.
• The greatest understanding and realization of
the MFIs are that the poor are nothing but
clients, and these poor clients are not only
willing but are also able to pay for access.
• Higher outreach by MFIs in Indian
microfinance market was characterized by
doorstep lending, low transaction cost, less
transition period, and development of simple
application procedure for clients.
• MFIs could also able to maintain the growth of
outreach by attaining institutional
sustainability by bringing down the
administrative/operational costs to a lower
level.