Expansion Strategies in Microfinance

What are the different options available to an MFI to expand its business?
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In the current climate, many MFIs are dealing with increased competition in their markets, forcing them to give better focus on differentiation while maintaining low cost products and services. As markets mature, clients are also starting to demand a greater variety of products and services.Institutions are experiencing increased pressure to achieve and sustain growth. Recent trends indicate that various strategies and structures are being utilized by MFIs, including growing through existing operations, legal restructuring, franchising, strategic alliances and mergers and acquisitions.What options are most appropriate for MFIs operating in different environments? What are frameworks to evaluate vis-à-vis different expansion strategies? It is critical for MFIs to understand which type of expansion strategy is best for suited for them. Expansion Startegies in Microfinance, will illustrate that there is not a "one-size-fits-all" model for successful expansion.

This focus note explores these options in detail, including legal structuring, franchising, strategic alliances, and mergers and acquisitions each illustrated by a case study.

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About this Publication

By Rodrigues, H. & Morente, T.