Client-Profiling Study: A Qualitative Study of Experiences of Female Microfinance Clients
This study uses client profiling to document and understand how women decide to become clients of an MFI, how they utilize their loan amount and what factors guide loan usage and repayment patterns. It seeks to address basic gaps in knowledge about microfinance borrowers, by focusing on the end user. The study profiles clients of MFI Mahasemam in Tamil Nadu, India. Complications on the field, time constraints, inability to choose study participants randomly, problems of memory recall and small sample size were some of the problems that the study encountered. Findings indicate that Mahasemam clients:
- Exhibit regular repayment behavior once they receive another loan, despite extended disappointment from the MFI;
- Exhibit good behavior in the hope of getting another loan;
- Always have the capacity to repay by borrowing from money lenders.
The study concludes that old loans will return to MFIs until they find the next channel to finance their lending, if they have clients like Mahasemams, who exhibit good behavior in the face of uncertainty. It demonstrates the effectiveness of client profiling as a tool that MFIs can use to modify their programs to better suit clients needs and to meet program objectives.