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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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