Engaging the Private Sector in Microfinance

Successes and obstacles in profitably providing microfinance

Elisabeth talking about the case studies from her book

Interactive Session on the challenges and solutions in private sector microfinance

September 16, 2009 SVMN Speaker Event re-cap written by Leslie Roulias

The SVMN speaker event on September 16th on “Engaging the Private Sector in Microfinance” featured Managing Director of the Center for Financial Inclusion at ACCION International, Elisabeth Rhyne.  Elisabeth recently published the book Microfinance for Bankers and Investors – Understanding the opportunities and challenges of the market at the Bottom of the Pyramid.

The first half of the book gives a road map for private sector companies looking to enter into the microfinance sector, and the second half uses case studies, across several industries, to look at private-sector company activities with double bottom line benefits serving the bottom of the pyramid.  Elisabeth took the SVMN event attendees through three of these case studies giving lessons both to private sector businesses, as well as to existing MFIs.  One of the private sector lessons was to evaluate the low-income market differently than the main-stream market.  A lesson for MFIs was to think big, get creative, and to form good partnerships.

Elisabeth advocated defining microfinance not only in terms of microcredit, but also as financial inclusion for all financial services.  She emphasized that high quality service is necessary to sustain a successful double bottom line organization.  She charged the SVMN members to endorse the campaign for client protection in Microfinance, which ACCION International created based on six principles that should comprise the industry’s commitment to client protection:

1. Avoidance of over-indebtedness
2. Transparent pricing
3. Appropriate collections practices
4. Ethical staff behavior
5. Mechanisms for redress of grievances
6. Privacy of client data

Endorsing the ACCION International campaign for client inclusion can be done here

Elisabeth’s book is available on Amazon