Paper

Scaling up Microfinancial Services: An Overview of Challenges and Opportunities

Innovative strategies to scale up microfinance in India
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This paper identifies strategies for scaling up. The paper finds the following as impediments to scaling up microfinancial services:

  • High transaction costs incurred to serve the poor;
  • Adverse risk selection and moral hazard problem;
  • Lack of appropriate delivery structures.

The authors feel that the outreach of micro financial services can be improved by:

  • Strategic partnerships between formal financial service providers and MFIs and NGO that provide microfinance;
  • Risk sharing between banks and MFIs that have operational capabilities to provide microfinancial service;
  • Leveraging technology to expand the base of microfinance service provider;
  • Bundling credit with other risk management instruments such as insurance;
  • Accessing capital markets for funds.

About this Publication

By Ananth, B., George, S. A.
Published