Case study

Setting Standards and Sticking to Them: When Microfinance Network NGOs Decide to Exit

Sharing insights into exit policies and processes in microfinance
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This focus note explores organizations'’ approaches to divesting microfinance operations or disaffiliating a partner or subsidiary.It shares experiences of four organizations, namely, CHF International, Adventist Development Relief Agency (ADRA), FINCA International and Women’s World Banking (WWB). Common themes that emerge from the four cases include:

  • Establishing and communicating consistent performance criteria, standards and guidelines at the outset is critical to managing affiliate relationships, even as they dissolve;
  • Treating stakeholders with respect is important, such that clients continue to access services without disruption even as an organization exits;
  • Networks were willing to put in additional investment only if affiliates' eventual financial autonomy was certain;
  • In CHF, ADRA, and FINCA, an appropriate local partner that could acquire the program so as to continue its services was crucial;
  • Culture of opening and expanding MFIs predominates shuttering or disaffiliating a microfinance lending program.

The paper states that sharing these experiences is a step towards greater transparency, and may assist others to establish successful investments, affiliations and partnerships with MFIs. It also gives them some tools and approaches when and if they decide to exit.