Paper

Transforming Microfinance Institutions: Providing Full Financial Services to the Poor

Helping MFIs transform into regulated deposit-taking financial intermediaries

This book derives lessons from experiences of various institutions that have transformed into deposit-taking financial intermediaries in the last decade. It looks specifically at the process of transforming from a credit-focused MFI to a regulated deposit-taking financial intermediary.

The book states that transformation requires sound regulation and supervision as well as institutional capacity and culture. MFIs transform so that they can offer additional products and services, gain access to capital and increase outreach. Benefits of transformation include:

  • Savings mobilization;
  • Expanded funding;
  • Increased outreach;
  • Diversification in ownership and governance structures;
  • Increased professionalism among staff;
  • Improved management information systems;
  • Improved overall internal controls.

These benefits, combined with focus on customer service and increased transparency, have resulted in improved performance and efficiencies that have benefited clients. The book stresses that transformed MFIs have mostly met their objectives in becoming regulated institutions.

About this Publication

By Ledgerwood, J. & White, V.
Published