We firmly believe that an integrated approach to servicing clients can enhance microfinance’s effectiveness as a poverty alleviation tool. The benefits of this approach are twofold.
First, by acting as a platform to deliver important social services along with credit and financial services, MFIs can contribute to greater sustainability at the client level. Integrating microfinance with social services such as health, education and natural disaster relief or prevention addresses the other contributing factors to poverty beyond the economic factor. In doing so, we are providing clients with a comprehensive solution to minimize the risks they face.
By addressing the very issues that inhibit a client’s chances of succeeding with microfinance, microfinance can increase its overall efficacy. Focusing on client sustainability instead of institutional sustainability is how the field can ensure that we are not just reaching more individuals, but that we are providing them with the services they really need once we do reach them, and that we accompany them throughout their journey to economic freedom.
Second, using microfinance as a platform to offer integrated services increases economies of scope for all the organizations involved in trying to service the same base of clienteles. With leveraged resources – assets, infrastructure, knowledge, distribution channels, etc. – we can increase the capacity of the service offerings to reach more clients and to reach them more effectively. By partnering with other critical social providers and businesses and serving as a platform, microfinance can offer other organizations with a distribution channel to reach individuals in need, share experiences in working in a particular region and community, and offer countless other tangible and intangible products and services. This only makes sense because microfinance is not in the business of maximizing profits but rather of maximizing lives touched and transformed.
With that said, we encourage microfinance institutions to follow in the steps of pioneers, such as the Grameen Bank, BRAC, Pro Mujer, Fonkoze and Sareeram, in offering integrated services to their clients and to partner wherever it makes sense. The fight to alleviate poverty is too great a task for anyone or any one discipline to combat it alone. As an entrenched and recognized leader in this mission, microfinance can serve as a bridge beyond banking and development. It can be the link that brings together the services and products available today to the people who need them most. Only through a collective effort will we have the best chance of succeeding.
Microfinance: A Platform for Social Change by Marge Magner March 2007 Grameen Foundation
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Grameen Foundation
(Visit Grameen's Website)
Grameen Foundation's mission is to empower
the world's poorest people to lift
themselves out of poverty with dignity
through access to financial services and
to information.
With tiny loans, financial services and
technology, we help the poor, mostly
women, start self-sustaining businesses to
escape poverty. Founded in 1997 by a group
of friends who were inspired by the work
of Grameen Bank in Bangladesh, our global
network of microfinance partners reaches
over 3.6 million families in 25 countries.
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