Beyond Basic Credit and Savings: Developing New Financial Service Products for the Poor

Increasing numbers of MicroFinance Institutions (MFIs) are seeking to diversify the financial services they offer to their clients. There is a growing understanding and acceptance of the diverse nature of the credit needs of the poor, and an awareness that not all of these are addressed by pushing “productive loans”. Thus there is a pressing need to examine the best ways of designing and introducing new financial service products into MFIs.

BURO, Tangail is committed to providing flexible and responsive financial services to its clients and operating in what is perhaps the most competitive market in the world of MicroFinance. Having long been a market leader in open access, voluntary savings accounts, BURO, Tangail is currently testing a wide variety of savings and loan products.

The BURO, Tangail methodology is examined with additional material and insights from a recent series of studies of successful innovative and poor-responsive banks financed by GTZ as part of the work of the CGAP’s “Financial Instruments (Savings Mobilization) Working Group”, and Marguerite Robinson’s work on Bank Raykat Indonesia. The paper offers a generalised methodology for those committed to going beyond basic credit and savings and developing new financial service products for their clients.

[Adapted from the author's abstract]