Cooperatives – The Flawed Gem of Indian Rural Finance
This note discusses the vast networks of cooperatives in delivering financial services in India. The overall financial performance of the cooperatives is weak when compared to commercial banks in India.
Designing innovative products, processes, and channels to promote microfinance
The microfinance industry has traditionally seen poor people’s needs for financial services only as “credit for enterprise”. However, due to their various life cycle needs, low income clients need a range of “financial services” and not just the traditional mono-product of working capital loan. In response to this emerging need of the sector, growing numbers of financial institutions are developing and delivering a range of financial services customised to cater to client needs. This paper examines some of the products designed (many in collaboration with MicroSave) as a respond to these needs, as well as some of the innovative delivery processes currently under testing. It also reviews the MicroSave approach to product design. It concludes with comments on NABARD’s Kisan Credit Card and implications of the changing face of microfinance for the “massification” of financial services for the low income market in India.