Seeking to Serve Millions, Not Hundreds: Helping US Microfinance Institutions Go Beyond What They Know
This paper examines the state of financial exclusion in the U.S. and looks at the role that MFIs can play in bridging the gap between demand and supply of financial services. The U.S. microfinance market aspires to assist low-income people and those with little or no credit, but market demand for financial services far exceeds current supply. U.S. MFIs need to leverage partnerships, expand markets and design innovative products and services. The paper states that they must:
- Isolate constraints and generate new strategies to achieve scale;
- Hone target markets, building linkages with regulated financial institutions, and design applicable products as starting points to advance the industry;
- Be part of a solution at sufficient size to matter in positively impacting the lives of people in need;
- Develop viable means to scaling up products and services to enhance outreach.
MFIs need to consider new ways of doing business to meet real demand and need in order to build a healthier financial future for Americans. They need to develop innovative strategies and a broader perspective to avoid becoming irrelevant.