Paper

Reputation and Communication in Microfinance: An Exploratory Study in Orissa, India

How can MFIs improve their communications strategy to develop a sound reputation?
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This study, on the politico-cultural context of MFIs, conducted in Orissa, India, explores the reasons why microfinance institutions (MFIs) have a negative image.The paper states that:

  • It is critical to understand the reputation of MFIs among various stakeholders and to what extent this reputation is negative.
  • To develop a sound reputation and protect themselves against defamation and misinformation, MFIs should:
    • Improve transparency;
    • Streamline their operations;
    • Develop their communications skills.

The study seeks to understand how the press, local politicians and other MFIs perceive emerging MFIs, the reasons behind these perceptions and the impact they have on MFI operations.It finds that MFIs in Orissa face three main challenges:

  • Unhealthy competition among themselves;
  • Competition from government schemes;
  • Lack of a strategic communications strategy.

The paper concludes that:

  • MFIs operate at the nexus of business, government and media, but do not realize that their success or failure depends upon how they do business in this complex environment.
  • They lack a strategic approach to build relations with the government.

The paper recommends that MFIs:

  • Develop a strategic communications strategy to promote their organizations;
  • Recognize that they operate in the same space as the government, and take steps to mitigate this potential conflict of interest;
  • Come together to build an institution that represents the sector on issues of mutual interest.

About this Publication

By Page, C.
Published