Nine Questions to Ask Every Microfinance Institution
February 25, 2009 4 Comments
How can you, a potential investor in microfinance, determine which microfinance institutions are the best place for your investment?
Grameen Foundation offers two key questions investors should be asking:
- Are microfinance institutions reaching poor clients?
- Are microfinance institutions helping move clients out of poverty?
To determine the answer to these questions, you need to drill down a bit further, and ask some specific questions. For example,
- What percentage of MFIs in the [investment] portfolio is using the Progress out of Poverty Index or a comparable poverty measurement tool?
The complete list of questions is here. I would also encourage you to check out Grameen Foundation’s website that serves as an information portal, here.
News and Commentary
Good stuff Ryan,
I have actually heard a lot of chatter about this topic, so it is definitely interesting to see someone following up on it. I think that considering these questions will help people make smarter and more efficient lending decisions.
[...] Calkins, over at SeaMo, recently made a post entitled “Nine Questions to Ask Every Microfinance Institution” which discusses some questions that the Grameen Bank has come up with to determine which MFIs are [...]
Dear Mr Ryan,
This is Abhishek Pandya from India, a Micro finance Practitioner. I just gone through with the blog. I am thankful to you to post these kind of content that can enhance the knowledge in relation with Micro finance.
I would like to share something with my experience that relates to the topic described above, Do you think really MFIs are focusing to the propoor community if its true how they will get their payment back because if i talk to the rural community basically propoor community they don’t have anything to pay back to MFI.
I have seen MFIs they are lending money but the target people are not ultimately propoorer they are a stairs up of propoor.
Read the book: What is wrong with Microfinance.
Don’t be afraid, the book is positieve about MF but it gives some important remarks on the system.