Microfinance: A Sustainable Platform for Non-financial Services

This article focuses on opportunities and challenges for microfinance organizations in providing integrated services. It notes that scores of studies have shown the positive impact that microfinance can have on the lives of poor people. However, overall progress has been disappointing. The authors propose that the achievement of poverty alleviation goals may call for new and innovative ways of working rather than more of the same.

The authors note that evidence from various studies show that the integration of microfinance with non-financial services has a potential for enormous contribution to poverty alleviation. They also provide supporting evidence that shows promising financial and health benefits of integration for the poor and the institutions (MFIs) that support their self-help efforts. Highlights of the article include:

• Description of types of services that can be provided through microfinance organizations to meet the comprehensive needs of their clients;
• Case study of two MFIs, Crédito con Educación Rural (CRECER) in Bolivia and Bandhan in India, to describe how these have integrated financial and health education, respectively.

The article concludes that the integration of complementary services intended for the same population can lead to enhanced operational efficiencies for the MFI and synergies of benefit for the poor.