The core mission of financial institutions is to deliver financial products and services to their clients. However, many microfinance institutions (MFIs) leverage their position in the communities they operate in to offer more than just financial products; this added dimension is often referred to as “microfinance plus.”
Through microfinance plus, MFIs might offer products or services related to health, education, energy, or environmental programs. These programs are sometimes linked to financial products, or they may be standalone products or services that are designed to bring about greater impact in communities, provide greater customer satisfaction, and encourage more people to become and remain clients. These products and services may be offered directly by the financial service provider or in partnership with other specialized organizations. Providing these additional services can be costly, so institutions often seek to find a balance between the cost of these services and potential income.
Water.org explains why water and sanitation loans have high repayment rates and should be prioritized by MFIs, and makes a call to all microfinance professionals to reject the misguided labeling of loans as either productive or for consumption only.
The pay-as-you-go (PAYGo) solar industry has attracted a lot of interest among impact investors. But complex business models and a lack of reporting standards may be putting off large-scale investment. PAYGo PERFORM says it is time to change that and standardize financial reporting in this sector.