Microfinancing in India – the building blocks for delivering shareholder value and impact at scale
India is recognised for having implemented the largest coordinated financial inclusion program in the world. The market size of the microfinance sector in India is estimated at USD 38 billion today and is projected to surpass USD 100 billion by 2025. Notwithstanding these accomplishments and the significant market potential, microfinance is yet to uplift the “bottom of the pyramid” from poverty. How should Micro Finance Institutions (MFIs) address this underserved market and deliver profitability and impact at scale?
Our article highlights the imperative for MFIs to transform from a traditional credit to a “credit plus” operating model by embedding the five key building blocks of success (the “5Cs”). We also exemplify the model by using the case study of SKDRDP (Sri Kshetra Dharmasthala Rural Development Project), the largest MFI in India. Finally, we also unravel the implications of the “credit plus” operating model in terms of performance management and impact assessment for MFIs and Impact Investors.
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