Should MFIs Offer More than Financial Services?

A new survey conducted by Microfinance Insights shows that 85% of MFIs and 61% of microfinance investors believe that MFIs should aim for wider social development beyond financial inclusion. The data comes at a time when many MFIs are expanding quickly by offering more customers microcredit. The results of the survey demonstrate that MFIs, in their effort to fight global poverty, should offer additional solutions through the relationships they have established with clients.

Seventy-nine percent of MFIs polled offer products and services that are consciously seeking to create social impact beyond simple financial inclusion, including community development (63%), inclusion of minorities (60%), and better employment and labor conditions (53%). In addition, more than 83% of MFIs polled said that they are committed towards poverty alleviation as their primary goal, while 78% maintained their social objective is “women’s empowerment.”

Over 150 respondents were polled, including investors in microfinance. While the results reveal a firm commitment from both MFIs and investors towards creating social impact, concerns remain over the process of measuring impact. The primary concerns among MFIs and investors were the associated time and cost structures. Sixty three percent of the investors polled said that an immature measurement framework is a major issue for impact assessment, followed by 60% who cited cost and time considerations.

Complete survey results can be found in the May/June 2009 issue of Microfinance Insights.

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