How to Promote Industry Innovation: A Technical Note for Microfinance Associations
This technical note discusses the types of tangible support that microfinance associations (MFAs) can provide to the innovation process. It includes case studies of three MFAs that have successfully identified, designed and promoted the adoption of high-impact innovations.
MFAs possess multiple advantages when it comes to promoting innovation in microfinance. They are exposed to a broad range of experiences through interaction with peers and regional and global actors. Adapting new ideas to local contexts is an essential function of associations. MFAs can support innovation through active participation in any one of the following stages:
- Product identification;
- Market research;
- Product design;
- Pilot phase experimentation;
- Evaluation;
- Large scale uptake.
The study discusses MFAs that have successfully supported product innovation in their markets. They include:
- Russian Microfinance Center examined branchless banking as a potential solution to provide access to financial services to Russia’s rural population;
- REDCAMIF, the Central American Microfinance Network, performed market analysis of micropension programs;
- Red Financiera Rural designed a microinsurance product for microentrepreneurs to provide them financial support in case of death or permanent disability.
