S3,NBFC NOTE

MODULE-4
Microfinance refers to providing financial services, such as small
loans (microloans), savings accounts, and insurance, to individuals
and small businesses who do not have access to traditional banking
services. The demand and supply of microfinance operate like a
typical economic market, where the interaction between people who
need financial services and those who provide them forms the
microfinance ecosystem.
1. Demand for Microfinance
The demand for microfinance comes from individuals or groups who
are underserved by conventional financial institutions. This includes:
 Low-income households: People in rural or urban areas who
need small loans for personal or business use but are not
eligible for traditional bank loans due to lack of collateral or
credit history.
 Micro-entrepreneurs: Small business owners who need working
capital to start or grow their businesses, such as farmers,
artisans, or street vendors.
 Women entrepreneurs: Many microfinance programs focus on
women, as they often have less access to traditional financial
services but play a key role in supporting families and
communities.
 Self-help groups (SHGs): In some countries, individuals come
together to form SHGs that pool their savings and take small
loans for their mutual benefit.
Key drivers of demand:
 Access to small, affordable loans for income-generating
activities.
  Lack of collateral requirements or complex documentation
processes.
 Desire for financial independence, especially among
marginalized groups.
 Demand for services like savings accounts and micro-insurance
in rural or remote areas.
2. Supply of Microfinance
The supply of microfinance services is provided by various institutions
and organizations, including:
 Microfinance Institutions (MFIs): These are specialized financial
institutions that provide small loans to people who do not have
access to traditional banking services. Examples include
Grameen Bank, SKS Microfinance, and other regional MFIs.
 Non-governmental organizations (NGOs): Many NGOs also
provide microfinance services or partner with MFIs to deliver
them. These organizations often work in underserved or remote
areas.
 Banks and cooperatives: In some cases, traditional banks or
cooperatives have separate microfinance divisions to cater to
small borrowers.
 Government programs: Governments in many developing
countries have special schemes to promote microfinance and
financial inclusion, particularly to uplift marginalized
communities.
 Private investors and social enterprises: Some private
investors, impact funds, or social enterprises also provide
capital for microfinance, viewing it as a tool for both financial
return and social good.
Key factors influencing supply:
  Availability of funds or capital to lend to borrowers.
 Regulatory frameworks that support or restrict microfinance
operations.
 The development of sustainable business models to keep MFIs
operational.
 Partnerships with governments, NGOs, or international
organizations to extend microfinance services.
The Interaction Between Demand and Supply in Microfinance
The balance between demand and supply determines the
accessibility and affordability of microfinance services. If demand
exceeds supply, potential borrowers may face long wait times or
higher interest rates. Conversely, if supply outstrips demand,
institutions may lower their interest rates or create innovative
products to attract more borrowers. The goal is to provide
sustainable financial services to those in need while ensuring the
financial health of the institutions providing them.
In conclusion, demand for microfinance comes from marginalized
individuals and small businesses in need of financial services, while
the supply is provided by institutions like MFIs, NGOs, and
cooperatives. The interaction between these two shapes the
microfinance ecosystem.
Micro Enterprise Market Analysis
Micro enterprises are small-scale businesses typically run by an
individual or a few employees. These enterprises operate with
minimal capital and resources, often serving local or niche markets.
Micro enterprise market analysis is crucial for assessing the viability
of these businesses and for understanding the environment in which
they operate.
1. Importance of Market Analysis for Micro Enterprises
Market analysis helps micro-enterprises:
 Identify demand: Understanding customer needs and
preferences helps micro businesses design their products or
services to match market demand.
 Assess competition: It helps evaluate the competitive
landscape and find opportunities to differentiate from other
small and large businesses.
 Spot opportunities: By analyzing market trends, micro-
enterprises can discover new business opportunities or
underserved markets.
 Minimize risks: Market analysis helps micro enterprises avoid
potential risks by identifying external threats or weaknesses.
2. Key Components of Micro Enterprise Market Analysis
A comprehensive market analysis includes several key components:
1. Market Research: Gathering data on customer preferences,
behaviors, and demographics is vital. Micro-enterprises need to
know:
o Who are the potential customers?
o What products or services do they need?
o Where are these customers located?
o When do they buy or use these products/services?
Methods of Market Research:
o Surveys: Simple surveys to understand customer
preferences.
o Interviews: Direct feedback from potential or existing
customers.
 o Observation: Monitoring customer behavior, especially in
retail markets.
o Focus groups: Group discussions to gain deeper insights
into customer needs.
2. Market Segmentation: Micro enterprises often serve niche
markets. Market segmentation divides a broad customer base
into smaller groups based on:
o Demographics: Age, gender, income, education, etc.
o Geographics: Urban, rural, regional locations.
o Psychographics: Lifestyles, attitudes, values.
o Behavioral factors: Purchase frequency, brand loyalty, and
usage rates.
Example: A micro enterprise producing handmade crafts may target
women in urban areas aged 25-40 with higher disposable income and
a preference for artisanal goods.
3. SWOT Analysis (Strengths, Weaknesses, Opportunities, and
Threats):
o Strengths: What advantages does the micro enterprise
have? (e.g., unique products, personal customer
relationships).
o Weaknesses: What are the limitations? (e.g., limited
capital, lack of formal training).
o Opportunities: Are there any market gaps that the
business can fill? (e.g., local demand for eco-friendly
products).
o Threats: What external factors might harm the business?
(e.g., economic downturn, new competitors).
 4. Competitor Analysis: Micro enterprises face competition from
both other micro businesses and larger firms. Analyzing
competitors involves:
o Identifying key competitors: Who are the direct and
indirect competitors?
o Evaluating their strengths and weaknesses: What do
competitors do well, and where can your business
outperform them?
o Assessing pricing and market positioning: How do
competitors price their products, and what market
segment do they target?
Tools:
o Porter’s Five Forces: A framework to understand the
competitive intensity and profitability of a market.
1. Threat of new entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of substitute products
5. Rivalry among existing competitors
5. Customer Behavior and Preferences: Micro enterprises must
understand their customers’ decision-making process. This
includes:
o What drives customer purchases? (e.g., price, quality,
convenience).
o How do customers perceive value? (Is the product or
service worth the price?).
 o What influences customer loyalty? (Customer service,
product consistency, etc.).
6. Demand Forecasting: Predicting future demand is critical for
micro enterprises to manage inventory, resources, and growth.
Demand forecasting includes:
o Historical sales data (if available).
o Market trends: Using insights from industry reports or
local market surveys.
o Economic indicators: Understanding how economic
factors (inflation, employment rates) might affect
customer spending power.
3. Tools for Micro Enterprise Market Analysis
Several tools can assist micro enterprises in conducting market
analysis:
 Business Model Canvas: A one-page tool that helps
entrepreneurs map out their value proposition, customer
segments, revenue streams, and more.
 PESTLE Analysis: A framework to evaluate external factors
affecting the business:
o Political: Government policies, taxation, trade laws.
o Economic: Inflation, interest rates, economic growth.
o Social: Cultural trends, population demographics.
o Technological: Innovations, access to technology.
o Legal: Regulations, intellectual property rights.
o Environmental: Sustainability concerns, climate change.
4. Sources of Market Data for Micro Enterprises
  Government Reports: Many countries provide free reports on
industry trends, small business statistics, and economic
indicators.
 Industry Associations: Trade groups often publish reports or
offer resources for small businesses.
 Local Chambers of Commerce: They can provide insights into
local market conditions and networking opportunities.
 Online Tools: Google Trends, social media analytics, and online
survey tools can help gather data on customer behavior and
preferences.
5. Conclusion: Strategic Decisions Based on Market Analysis
Based on the market analysis, micro-enterprises can make strategic
decisions such as:
 Target market selection: Focus on the most promising customer
segments.
 Product/service development: Tailor products or services to
meet the specific needs of the target market.
 Pricing strategy: Set prices that align with customer
expectations while covering costs.
 Marketing and sales strategy: Develop promotional activities
and channels (e.g., social media marketing, local advertising) to
reach potential customers effectively.
Financial Analysis in Microfinance
Financial analysis in the context of microfinance refers to assessing
the financial performance, sustainability, and viability of microfinance
institutions (MFIs) and their clients (micro-entrepreneurs or
borrowers). This analysis helps in evaluating whether the institution is
financially healthy, able to continue its operations, and effectively
serving its social mission of providing financial services to
underserved populations.
The overview of key financial analysis topics related to microfinance:
1. Key Financial Metrics in Microfinance
Several financial metrics are used to assess the health and
performance of a microfinance institution:
a) Operational Self-Sufficiency (OSS)
 Definition: Measures the ability of an MFI to cover its operating
costs (like salaries, office expenses, and loan losses) with the
income generated from its operations (interest and fees from
loans).
 Formula: OSS=Operating IncomeOperating Expenses\text{OSS}
= \frac{\text{Operating Income}}{\text{Operating
Expenses}}OSS=Operating ExpensesOperating Income
 Interpretation: If OSS > 100%, the MFI is operationally
sustainable, meaning it can cover its costs without external
funding.
b) Financial Self-Sufficiency (FSS)
 Definition: Evaluates the MFI's ability to cover not only
operational costs but also its financial costs, such as interest on
loans or the cost of capital, and adjusting for inflation or
subsidies.
 Formula:
FSS=Adjusted Operating IncomeAdjusted Operating Costs + Fina
ncial Costs\text{FSS} = \frac{\text{Adjusted Operating Income}}
{\text{Adjusted Operating Costs + Financial
Costs}}FSS=Adjusted Operating Costs + Financial CostsAdjusted
Operating Income
  Interpretation: FSS > 100% means the MFI is fully financially
sustainable, even without relying on grants or donor subsidies.
c) Portfolio at Risk (PAR)
 Definition: Measures the proportion of loans that are at risk of
default (typically overdue by more than 30 days).
 Formula:
PAR=Outstanding Loan Balance on Late LoansTotal Loan Portfoli
o\text{PAR} = \frac{\text{Outstanding Loan Balance on Late
Loans}}{\text{Total Loan
Portfolio}}PAR=Total Loan PortfolioOutstanding Loan Balance on
Late Loans
 Interpretation: A PAR < 5% is generally considered good in
microfinance, indicating that most loans are being repaid on
time.
d) Loan Repayment Rate
 Definition: The percentage of loans that have been repaid on
time by borrowers.
 Formula:
Repayment Rate=Total Amount RepaidTotal Amount Due\
text{Repayment Rate} = \frac{\text{Total Amount Repaid}}{\
text{Total Amount
Due}}Repayment Rate=Total Amount DueTotal Amount Repaid
 Interpretation: A high repayment rate indicates effective
borrower selection and loan management.
e) Return on Assets (ROA)
 Definition: Measures how efficiently the MFI is using its assets
to generate income.
  Formula: ROA=Net IncomeTotal Assets\text{ROA} = \frac{\
text{Net Income}}{\text{Total
Assets}}ROA=Total AssetsNet Income
 Interpretation: A positive ROA suggests that the MFI is
generating profit from its assets, while a negative ROA could
indicate inefficiencies.
f) Return on Equity (ROE)
 Definition: Shows how effectively the MFI is using its equity
(the capital invested by owners) to generate profits.
 Formula: ROE=Net IncomeTotal Equity\text{ROE} = \frac{\
text{Net Income}}{\text{Total
Equity}}ROE=Total EquityNet Income
 Interpretation: A higher ROE means the institution is generating
good returns for its shareholders or investors.
2. Financial Sustainability in Microfinance
Financial sustainability refers to an MFI’s ability to operate and grow
without relying on continuous external subsidies or donations. MFIs
are typically started with donor funds or grants, but long-term
sustainability requires that they generate enough income from their
lending operations to cover costs.
Factors Affecting Financial Sustainability:
 Interest Rates: MFIs typically charge higher interest rates than
traditional banks due to the high operational costs of serving
small, dispersed clients. However, the interest rate must
balance sustainability with social goals (i.e., being affordable for
borrowers).
 Cost Management: MFIs must manage costs related to loan
disbursement, monitoring, and collection. This is challenging as
they often operate in rural or remote areas.
  Loan Loss Provisions: MFIs need to account for potential
defaults by setting aside reserves (loan loss provisions), which
directly impacts their sustainability.
 Scale of Operations: Larger MFIs can achieve economies of
scale, reducing their per-unit cost of lending and improving
sustainability.
3. Risk Management in Microfinance
Due to the nature of lending to low-income individuals, microfinance
institutions face significant financial risks. Effective risk management
is critical for maintaining financial stability.
a) Credit Risk
 Definition: The risk that borrowers will not repay their loans,
leading to losses for the MFI.
 Mitigation Strategies:
o Careful borrower selection and credit scoring.
o Regular monitoring of borrowers.
o Offering smaller, shorter-term loans initially, and
increasing loan sizes as trust and creditworthiness are
established.
b) Operational Risk
 Definition: The risk of losses due to failures in internal
processes, such as loan disbursement, data management, or
fraud.
 Mitigation Strategies:
o Implementing strong internal controls.
o Training staff in risk management.
 o Using technology to streamline operations and reduce
human error.
c) Liquidity Risk
 Definition: The risk that the MFI will not have enough cash or
liquid assets to meet its obligations, such as funding new loans
or paying staff.
 Mitigation Strategies:
o Careful cash flow planning.
o Maintaining a healthy balance of cash reserves.
d) Interest Rate Risk
 Definition: The risk that changes in interest rates (for borrowing
or lending) could affect the profitability of the MFI.
 Mitigation Strategies:
o Aligning loan interest rates with the cost of capital.
o Using fixed-rate or variable-rate loans based on market
conditions.
4. Social and Financial Trade-offs
Microfinance institutions often face trade-offs between achieving
social goals (financial inclusion and poverty alleviation) and ensuring
financial sustainability.
a) Depth of Outreach vs. Financial Sustainability
 Serving the poorest and most marginalized populations can be
costly and riskier, leading to higher operational costs and
potential losses. Balancing this with the need to stay financially
viable is a challenge.
b) Mission Drift
 There’s a risk that, in seeking financial profitability, MFIs might
shift their focus away from serving the poorest (mission drift)
and instead target wealthier clients who are more profitable.
5. Financial Products and Services in Microfinance
Microfinance institutions offer various financial services aimed at
low-income individuals and micro-enterprises:
a) Microloans
 Small loans provided to entrepreneurs or small businesses for
productive purposes.
 These loans typically have short terms and are repaid through
regular installments.
b) Micro-savings
 Savings accounts that allow low-income clients to save small
amounts regularly, providing them with a safe place to store
their money.
 Savings can also serve as a form of collateral for loans.
c) Micro-insurance
 Insurance products designed to protect low-income individuals
from specific risks (e.g., health, crop failure, life).
 Micro-insurance helps mitigate the risks that might otherwise
push borrowers into poverty.
d) Micro-leasing
 A form of financial service where clients can lease equipment or
assets (such as machinery or livestock) instead of purchasing
them outright, allowing micro-entrepreneurs to access the tools
they need to grow their businesses.
Conclusion:
Financial analysis in microfinance is essential for understanding the
performance, risks, and sustainability of MFIs. By evaluating key
financial metrics like OSS, PAR, and ROE, MFIs can assess their
efficiency and impact. At the same time, careful risk management
and balancing social and financial objectives are critical to ensuring
the long-term viability of the microfinance sector.
For microfinance institutions, the goal is not only to achieve financial
success but also to empower low-income individuals through
financial inclusion, making financial analysis a key part of their
operations.
Technological Analysis:
Technological Analysis is the evaluation of how technology impacts
an industry or a business environment. It involves assessing the role
of existing, emerging, and potential technologies in shaping business
strategies, improving operations, and gaining competitive
advantages. For MBA students, understanding technological analysis
is critical because technology is one of the most dynamic factors
influencing businesses today.
1. Importance of Technological Analysis
Technological analysis helps businesses:
 Stay Competitive: Companies can use technology to streamline
operations, improve customer experience, and innovate
products and services, which gives them an edge over
competitors.
 Identify Opportunities and Threats: Technology often creates
new markets and opportunities, but it also brings disruptive
innovations that can threaten existing business models.
  Improve Decision-Making: Understanding technological trends
allows firms to make informed decisions about investments in
technology, research and development (R&D), and partnerships.
 Enhance Efficiency: Businesses can adopt new technologies to
automate processes, reduce costs, and increase productivity.
Components of Technological Analysis
a) Current Technology Trends
 Understanding the Status Quo: This involves examining the
technologies that are currently in use within the industry or by
competitors. It includes analyzing:
o The level of adoption of new technologies.
o How these technologies impact productivity, customer
engagement, and cost-efficiency.
Examples: The widespread use of cloud computing, artificial
intelligence (AI), and data analytics in industries such as healthcare,
banking, and retail.
b) Emerging Technologies
 Technological Innovation: Businesses must keep an eye on
emerging technologies that could disrupt their industries or
create new opportunities. These technologies might not yet be
mainstream but have the potential to transform business
operations.
Examples: Blockchain in finance, autonomous vehicles in
transportation, 3D printing in manufacturing, and augmented reality
(AR) in retail.
c) Technology Life Cycle
  Stages of Technology Development: Understanding where a
particular technology stands in its lifecycle can help businesses
plan for future investments or changes.
o Introduction: New, innovative technology that is being
developed or just introduced to the market.
o Growth: The technology starts gaining traction and
adoption.
o Maturity: The technology is widely adopted, and its
growth stabilizes.
o Decline: The technology becomes obsolete or is replaced
by better alternatives.
Example: Personal computers (PCs) are in the maturity phase, while
quantum computing is in the introduction phase.
d) Technological Infrastructure
 Assessing the Availability of Supporting Infrastructure:
Businesses must analyze whether the necessary technological
infrastructure (e.g., internet access, telecommunications, cloud
computing services) is in place to support new technologies.
o This includes evaluating software, hardware, networks,
and digital platforms that enable technology
implementation.
Example: 5G technology is critical infrastructure for enabling the
Internet of Things (IoT) and autonomous systems.
e) R&D and Innovation Capability
 Internal R&D: Companies often need to invest in research and
development to innovate and create new products or
processes.
  Collaborations: Businesses can collaborate with technology
firms, research institutions, or universities to drive innovation
and stay ahead in the technological race.
Example: Pharmaceutical companies often partner with biotech firms
or academic researchers to develop new drugs and medical
technologies.
3. Tools and Frameworks for Technological Analysis
MBA students should be familiar with some key tools and
frameworks used in technological analysis:
a) PESTLE Analysis (Technological Factor)
 Technological Factor in PESTLE: In PESTLE analysis (Political,
Economic, Social, Technological, Legal, and Environmental
factors), the Technological factor focuses on the role of
technology in an industry or market.
o Questions to Ask:
 What technologies are most influential in this
industry?
 Are there any emerging technologies that could
disrupt the market?
 How is innovation being driven within the sector?
Example: In the automotive industry, electric vehicles (EVs) and
autonomous driving technology are transforming the market, and any
business in this sector must account for these changes.
b) Porter’s Five Forces (Technological Influence on Competitive
Forces)
 Technology and Competition: Technological advancements can
alter the competitive dynamics within an industry. In Porter’s
Five Forces, technology can:
 o Lower barriers to entry for new players.
o Increase the bargaining power of suppliers if they control
key technologies.
o Create substitute products or services (e.g., ride-sharing
apps disrupting traditional taxi services).
c) Technology Roadmapping
 Strategic Planning for Technology: A technology roadmap is a
tool used by businesses to plan the development and
implementation of new technologies over time.
o It identifies key technological milestones, timelines, and
the resources required for implementation.
Example: A smartphone manufacturer might develop a roadmap for
integrating foldable screens and AI-powered features into future
product models.
d) SWOT Analysis (Technological Aspects)
 Technology in SWOT: In the SWOT framework (Strengths,
Weaknesses, Opportunities, Threats), technology plays a role in
both internal and external factors.
o Strengths: Having proprietary or cutting-edge technology
can be a significant strength.
o Weaknesses: Relying on outdated or inefficient
technology can be a liability.
o Opportunities: Emerging technologies often present new
business opportunities (e.g., adopting AI for data analysis).
o Threats: Disruptive technologies from competitors can
pose a threat to market share.
4. Impact of Technology on Business Operations
a) Production and Operations
 Technology can enhance manufacturing processes, improve
supply chain efficiency, and optimize inventory management.
Automation, robotics, and AI are transforming traditional
operations.
Example: Amazon uses AI-powered robots in its warehouses to
manage inventory, increasing efficiency and reducing human error.
b) Marketing and Customer Experience
 Digital marketing tools like social media, big data analytics, and
AI enable businesses to personalize marketing campaigns,
predict customer behavior, and enhance customer experiences.
Example: Netflix uses AI algorithms to recommend shows and movies
to users, which enhances customer satisfaction and retention.
c) Finance and Accounting
 Fintech innovations, such as blockchain, AI-powered accounting
software, and mobile banking, are transforming how businesses
manage finances, process transactions, and maintain
transparency.
Example: Automated financial reporting tools like QuickBooks
simplify bookkeeping for businesses.
d) Human Resource Management
 HR functions such as recruitment, employee training, and
performance evaluation are increasingly reliant on technology,
including AI, machine learning, and cloud-based HR
management systems.
Example: Companies use AI to screen resumes, predict employee
performance, and manage HR tasks like payroll and compliance.
5. Challenges in Technological Analysis
Technological analysis is complex, and businesses may face several
challenges:
 Rapid Pace of Technological Change: Technology evolves
rapidly, and staying up to date can be difficult, especially for
businesses without a dedicated R&D team.
 High Costs of Adoption: Implementing new technologies often
requires significant capital investment, which might not be
feasible for smaller businesses.
 Obsolescence Risk: Technologies can become outdated quickly,
and businesses need to ensure that their investments in
technology have long-term viability.
 Cybersecurity Risks: As businesses adopt more digital
technologies, they become vulnerable to data breaches and
cyberattacks.
Strategic Implications of Technological Analysis
Technological analysis is essential for businesses to remain
competitive in today’s fast-paced environment. By understanding the
technological landscape, businesses can:
 Identify new opportunities for innovation.
 Gain a competitive edge through the adoption of advanced
technologies.
 Avoid the risks of technological disruption by adapting quickly.
 Improve operational efficiency and deliver better customer
experiences.
Mastering technological analysis is crucial for developing strategic
thinking and leadership skills in an era where technology drives
business transformation.
 Socio-Economic Analysis
Socio-economic analysis refers to the study of the relationship
between economic activity and social factors. It involves
understanding how economic conditions affect society and how
social factors, in turn, shape economic activities. This type of analysis
looks beyond mere economic indicators like GDP, inflation, or
unemployment, and incorporates the social, cultural, and
demographic elements that affect human behavior, consumer
preferences, and business environments.
Components of Socio-Economic Analysis
a) Demographic Factors
 Population Size and Growth: Businesses need to understand
population trends (e.g., aging population, youth bulge,
urbanization) as they influence market size, labor supply, and
consumer preferences.
Example: An aging population may demand more healthcare
services, while a growing urban population may increase demand for
housing and transportation.
b) Income Distribution
 Income Levels and Inequality: Understanding how income is
distributed across different segments of the population is
crucial. A highly unequal society may limit market potential for
luxury goods but increase the demand for affordable products.
Example: In economies with a large middle class, consumer demand
for mid-range products (e.g., electronics, automobiles) is likely to be
higher.
c) Employment and Labor Markets
 Unemployment Rates and Job Sectors: High unemployment
may limit consumers' purchasing power, while labor shortages
 in certain industries may drive up wages. This affects the supply
chain and cost of production for businesses.
Example: The rise of gig economies (freelancers, contract workers) in
countries like the US has changed how companies hire and manage
human resources.
d) Education Levels
 Skills and Human Capital: The educational attainment of a
population affects its productivity, innovation capacity, and
income potential. Higher education levels are associated with
higher income and more sophisticated consumption patterns.
Example: A well-educated population can adopt advanced
technologies more quickly, driving growth in sectors like IT and high-
tech manufacturing.
e) Cultural and Social Norms
 Behavioral Patterns and Consumer Preferences: Social and
cultural attitudes, values, and traditions affect consumption
choices, business practices, and marketing strategies.
Example: In some cultures, family-centered consumption is more
important, influencing products such as food, housing, and
healthcare.
f) Health and Welfare
 Health Status and Access to Services: The overall health of the
population (e.g., life expectancy, prevalence of diseases) can
influence industries like pharmaceuticals, insurance, and
healthcare.
Example: A rise in chronic diseases like diabetes or obesity can
increase demand for healthcare services and wellness products.
The Importance of Socio-Economic Analysis in Business
a) Market Segmentation and Targeting
 Businesses can identify and target specific socio-economic
segments (age, income, education) to tailor products or services
to their needs.
Example: A company might focus on creating affordable smartphones
for low-income groups or luxury smartphones for affluent consumers.
b) Social Impact and Corporate Social Responsibility (CSR)
 Socio-economic analysis helps businesses understand the
societal impact of their operations and develop CSR initiatives
that address relevant social issues.
Example: Companies may engage in initiatives to improve education,
provide healthcare access, or create job opportunities in underserved
communities.
c) Policy and Regulation
 Governments often use socio-economic analysis to create
policies that support economic development, poverty
reduction, and social welfare. Businesses must be aware of
these policies to align their strategies accordingly.
Example: Governments may provide subsidies for industries that
focus on sustainable development or poverty alleviation.
Environmental Analysis
Environmental analysis involves studying external environmental
factors that affect an organization's operations, strategies, and long-
term sustainability. This analysis is a key part of the broader PESTLE
(Political, Economic, Social, Technological, Legal, Environmental)
framework, where the "Environmental" aspect focuses on the
ecological and natural environment in which a business operates.
Components of Environmental Analysis
a) Ecological and Climatic Factors
 Climate Change: Changes in climate can affect businesses in
various ways, from disrupting supply chains to altering
consumer demand. Companies need to analyze how they might
adapt to or mitigate climate-related risks.
Example: Agriculture-based businesses are directly affected by
changing weather patterns, while energy companies must assess how
to reduce their carbon footprint.
b) Natural Resource Availability
 Resource Depletion: Access to natural resources such as water,
fossil fuels, minerals, and arable land is a key concern for many
industries. Companies must assess their dependency on these
resources and explore alternatives if they are scarce or
diminishing.
Example: The automotive industry’s shift towards electric vehicles is
driven by concerns over the depletion of oil and natural gas.
c) Pollution and Waste Management
 Environmental Degradation: Businesses must analyze how their
operations contribute to environmental pollution and waste
generation, and how regulatory pressures around pollution
control and waste management could affect their costs.
Example: Manufacturing industries need to manage emissions,
waste, and toxic by-products in compliance with environmental
regulations.
d) Environmental Regulations and Policies
 Government Regulation: Laws and policies governing
environmental protection, such as carbon emissions limits,
 pollution control, and renewable energy targets, affect business
operations, costs, and strategic planning.
Example: Many countries have implemented carbon trading systems
or carbon taxes to encourage companies to reduce their greenhouse
gas emissions.
e) Technological Innovations for Sustainability
 Green Technology: Innovations in technology can help
companies reduce their environmental impact, such as by
improving energy efficiency, reducing emissions, or minimizing
waste. Investing in "green" technologies can enhance a
company’s reputation and long-term viability.
Example: Solar and wind power technologies have become crucial for
energy companies transitioning from fossil fuels to renewable energy.
f) Biodiversity and Conservation
 Ecosystem Services: Businesses that rely on ecosystems for
their raw materials (e.g., agriculture, forestry, fisheries) must
analyze the state of biodiversity and engage in practices that
promote conservation.
Example: Coffee companies must ensure that the ecosystems where
coffee beans are grown remain healthy and sustainable over the long
term.
The Importance of Environmental Analysis in Business
a) Sustainability and Corporate Strategy
 Businesses increasingly recognize that their long-term success is
tied to environmental sustainability. Environmental analysis
helps companies incorporate sustainability into their business
models, ensuring they minimize ecological impacts while
remaining competitive.
Example: Many companies are adopting Environmental, Social, and
Governance (ESG) criteria to guide their sustainability strategies.
b) Risk Management
 Environmental risks, such as climate change, pollution, and
resource depletion, can have financial implications for
businesses. Environmental analysis helps identify these risks
and create mitigation strategies.
Example: A coastal real estate company may need to assess the risk
of rising sea levels and incorporate flood defenses or relocate
vulnerable properties.
c) Compliance with Environmental Regulations
 Governments around the world are tightening environmental
regulations to protect natural resources and reduce pollution.
Businesses must comply with these laws to avoid fines,
penalties, or reputational damage.
Example: Automotive companies are required to meet stringent
emission standards in various markets, pushing them to innovate
with cleaner technologies like electric vehicles.
d) Competitive Advantage through Sustainability
 Companies that adopt environmentally friendly practices can
gain a competitive edge by attracting eco-conscious customers,
reducing operational costs, and positioning themselves as
leaders in sustainability.
Example: Companies like Patagonia and Tesla have built strong brand
reputations by prioritizing sustainability and eco-friendly innovations.
e) Consumer Behavior and Environmental Consciousness
 Modern consumers are becoming more environmentally
conscious, and this is influencing their purchasing decisions.
 Companies that demonstrate their commitment to
sustainability are more likely to win the loyalty of these
consumers.
Example: Many customers prefer to buy products made from
recycled materials or choose brands that support environmental
causes.
Both socio-economic and environmental analysis are critical
components of strategic business planning. They help businesses
understand external factors that influence market conditions,
consumer preferences, and regulatory environments. By conducting
thorough socio-economic and environmental analyses, businesses
can:
 Align their operations with societal and environmental
expectations.
 Identify new opportunities and mitigate risks.
 Ensure long-term sustainability and competitiveness in an
evolving business landscape.
 Implementation and Monitoring of Credit Delivery
Methodologies in Indian Microfinance
 In microfinance, implementation and monitoring of credit
delivery involve executing the lending methodologies while
ensuring loans are delivered to the right beneficiaries and
repayment is managed efficiently.
 1. Credit Delivery Methodologies in India
 MFIs in India employ a range of credit delivery methodologies
to reach underserved populations, especially in rural areas.
Some of the prominent methodologies include:
 a) Self-Help Groups (SHGs)
 SHGs are small groups of individuals (often women) who pool
their savings and lend to members. SHGs are often linked to
formal financial institutions like banks, which provide loans
based on the group’s collective savings and repayment history.
 Features:
 Group members take collective responsibility for loan
repayment.
 SHGs promote financial literacy and empowerment, especially
among women.
 Advantages:
 Strong peer pressure ensures high repayment rates.
 Low operational costs for MFIs due to the group-based
approach.
 Example: NABARD’s SHG-Bank Linkage Program (SBLP) has been
a successful model for providing credit to rural women.
 b) Joint Liability Group (JLG)
 In JLGs, individuals come together to form a group, but unlike
SHGs, they do not necessarily save together. Instead, they
borrow collectively, and each member guarantees the
repayment of others’ loans.
 Features:
 Group members act as guarantors for one another’s loans.
 Typically used for agricultural or small business loans.
 Advantages:
 High repayment rates due to the group’s mutual accountability.
 Suitable for people who need larger loans but lack collateral.
 Example: Many MFIs in India use the JLG model to lend to small
farmers and rural entrepreneurs.
 c) Grameen Model
 Grameen model, pioneered by Muhammad Yunus, is a group-
lending system where small groups (usually 5 members) receive
loans, but loans are disbursed one at a time. Repayment by all
group members is a prerequisite for the next loan cycle.
 Features:
 No collateral is required.
 Group members meet regularly with the MFI officers.
 Advantages:
 High loan repayment rates due to social pressure within the
group.
 Regular meetings promote financial discipline and literacy.
 Example: SKS Microfinance and Bandhan Bank have adapted
this model successfully in various parts of India.
 d) Individual Lending
 In individual lending, MFIs provide loans to individuals without
requiring group participation or guarantees. These loans are
typically provided to slightly higher-income borrowers who
need larger loans for business expansion.
 Features:
 Requires more extensive credit checks and collateral for larger
loans.
 Higher operational costs compared to group lending models.
 Advantages:
 Allows for more significant loan amounts.
 Suitable for individuals who have established businesses but
lack access to formal credit.
Monitoring Mechanisms for Microfinance Credit Delivery
 Effective monitoring ensures that microfinance credit programs
are implemented as planned and that they achieve their
intended objectives.
 a) Loan Disbursement Monitoring
 Field Visits and Surveys: MFIs regularly conduct field visits to
verify that loans are being disbursed to eligible beneficiaries
and that they are being used for the intended purposes (e.g.,
income-generating activities, agricultural inputs).
 Example: Field officers visit SHGs or JLGs to track loan
disbursements and utilization.
 b) Loan Repayment Monitoring
 Repayment Tracking: Regular monitoring of repayment
schedules helps ensure that borrowers are staying on track.
MFIs use technology like mobile apps and digital platforms to
track repayments in real-time.
 Example: Many MFIs use mobile apps to send repayment
reminders to clients and track missed payments.
 c) Financial Literacy and Client Training
 Capacity Building: MFIs often provide financial literacy training
to ensure that clients understand the terms of their loans,
repayment schedules, and the importance of using loans for
productive purposes.
 Example: MFIs conduct workshops to educate SHG members on
budgeting, savings, and debt management.
 d) Social Performance Monitoring
 Impact Assessment: MFIs conduct periodic assessments to
measure the social impact of microfinance, such as
improvements in household income, employment, and
women's empowerment.
 Example: Some MFIs track improvements in clients' standard of
living, such as better access to healthcare, education, and
housing.
 e) Digital Monitoring Tools
 Mobile Banking and Digital Platforms: Digital solutions have
become essential for monitoring credit delivery in remote
areas. Mobile banking platforms help MFIs track repayments,
disburse funds, and communicate with clients.
 Example: Ujjivan Small Finance Bank and Bandhan Bank use
mobile apps and digital banking services to monitor loan
delivery and repayment.
Logical Framework, Implementation, and Monitoring of
Microfinance in India
 The logical framework approach provides a structured way for
MFIs to plan, implement, and monitor their microfinance
programs. With methodologies like SHGs, JLGs, and the
Grameen model, MFIs can deliver credit to underserved
populations in India, while effective monitoring systems ensure
transparency, accountability, and sustainability. By combining
structured planning with robust monitoring, MFIs can
contribute significantly to financial inclusion and poverty
alleviation in India.
 Module-5
Several tools and methods are used to analyze the
performance of microfinance institutions (MFIs),
helping assess their financial health, social impact, and
sustainability. Some commonly used tools and metrics include:
1. Financial Performance Metrics
 Portfolio at Risk (PAR): Measures the percentage of the loan
portfolio that is overdue. Typically calculated for 30, 60, or 90
days.
 Return on Assets (ROA): Assesses how efficiently the MFI is
using its assets to generate profits.
 Return on Equity (ROE): Indicates how effectively the institution
is using shareholders’ equity to generate profits.
 Operating Expense Ratio: Evaluates the institution’s cost-
efficiency by comparing operating expenses to the average
portfolio.
 Cost per Borrower: Helps to determine the cost incurred to
serve each borrower.
 Yield on Gross Loan Portfolio: Measures the actual income
from the loan portfolio, showing the earning potential of the
MFI’s lending activities.
2. Social Performance Metrics
 Outreach: Number of active clients or borrowers, including
geographical distribution and focus on marginalized
populations.
 Poverty Outreach: Measures how well the MFI reaches poorer
segments of the population.
 Client Retention Rate: Indicates customer satisfaction and
loyalty.
 Impact Studies: Surveys or impact assessments that measure
the socio-economic changes in clients’ lives due to microfinance
services.
3. Sustainability Metrics
 Financial Self-Sufficiency (FSS): Assesses whether the MFI can
cover its costs, including subsidies, and remain sustainable in
the long run.
 Operational Self-Sufficiency (OSS): Looks at whether the
institution’s revenue is sufficient to cover its operational
expenses.
 Profit Margin: Shows the percentage of revenue that translates
into profit.
4. Regulatory Compliance Tools
 CAMEL Rating: A comprehensive tool that evaluates MFIs based
on Capital Adequacy, Asset Quality, Management, Earnings, and
Liquidity.
 PEARLS Monitoring System: Used by some MFIs to assess
financial health based on a set of indicators under Protection,
Effective Financial Structure, Asset Quality, Rates of Return and
Costs, Liquidity, and Signs of Growth.
5. Market & Risk Analysis Tools
 Stress Testing: Helps assess how well the MFI can withstand
economic downturns or client defaults.
 SWOT Analysis: Identifies the Strengths, Weaknesses,
Opportunities, and Threats of the institution.
 Risk Rating Systems: Evaluates the credit, operational, market,
and liquidity risks facing the MFI.
6. Technology & Software Tools
 Microfinance Software (e.g., Mifos, Loan Performer, Bankers
Realm): These help in monitoring financial performance,
managing loans, tracking portfolio health, and generating
reports.
 Business Intelligence (BI) Tools: Analytical platforms like
Tableau or Power BI that help visualize performance metrics.
7. Balanced Scorecard
The Balanced Scorecard approach allows MFIs to align their
financial and social goals by tracking performance across four
perspectives: financial, customer, internal processes, and
learning/growth.
Each of these tools offers a different aspect of performance
analysis, and MFIs often use a combination of them to obtain a
comprehensive view of their operations.

Credit rating of Microfinance Institutions (MFIs)

is an assessment of the institution's ability to meet its debt
obligations, manage risks, and maintain financial stability. It is a
critical evaluation tool for investors, donors, and regulators to
assess the financial health and operational soundness of an
MFI. Credit ratings are typically provided by specialized rating
agencies and help determine the level of trust and
creditworthiness of the MFI.
 Key Aspects of Credit Rating for MFIs
1. Financial Health
Rating agencies assess the overall financial health of the MFI by
examining several key indicators:
o Capital Adequacy: The MFI's capital reserves and its
ability to absorb losses.
o Asset Quality: The quality of the loan portfolio, including
the rate of non-performing loans (NPLs) and loan portfolio
at risk (PAR).
o Earnings & Profitability: Metrics like Return on Assets
(ROA) and Return on Equity (ROE) are examined to
determine whether the MFI is generating sufficient
income to sustain operations.
o Liquidity: The MFI’s ability to meet short-term obligations,
ensuring they have enough liquid assets to cover
immediate liabilities.
o Operational Efficiency: The cost structure of the MFI,
including operational expenses and how efficiently it
manages costs relative to its income and portfolio size.
2. Risk Management
Evaluating how well the MFI manages risks, such as:
o Credit Risk: The risk of loan defaults by borrowers. This is
closely linked to the quality of the loan portfolio.
o Operational Risk: Risks associated with internal processes,
technology, and human resources.
o Market Risk: Risks related to economic changes, inflation,
and currency fluctuations.
 o Liquidity Risk: The risk of not having enough liquid assets
to meet short-term obligations.
3. Governance and Management
The strength and stability of the MFI’s management team,
board of directors, and governance structures are crucial
factors. Rating agencies look for:
o Experience and Leadership: A competent management
team with experience in microfinance.
o Internal Control Systems: Efficient checks and balances to
prevent fraud and manage operations smoothly.
o Strategic Planning: Clear business models and future
growth strategies.
4. Regulatory Compliance
The MFI’s adherence to local laws and regulations, as well as its
ability to maintain compliance with the central bank or
microfinance regulatory bodies, is critical in determining the
rating. Agencies also check for the MFI’s transparency and
disclosures in financial reporting.
5. Social Impact and Outreach
Some rating agencies also evaluate the MFI’s social
performance, especially if the MFI is mission-driven. This
includes:
o Outreach to Low-Income Clients: Assessing how well the
MFI serves its target clientele, including the poor and
underserved.
o Client Protection: Adherence to responsible lending
practices and ensuring that clients are not over-indebted.
 o Impact on Communities: Evaluating whether the MFI’s
activities are leading to positive social and economic
changes.
6. Portfolio Quality and Growth
The quality of the MFI’s loan portfolio is one of the most critical
factors in credit rating. Key aspects include:
o Portfolio at Risk (PAR): Measures the portion of the loan
portfolio that is overdue by more than a specified number
of days (usually 30, 60, or 90 days).
o Loan Loss Provisioning: The adequacy of provisions for
bad loans.
o Client Retention and Growth: The stability and growth of
the MFI’s client base.
Importance of Credit Ratings for MFIs
1. Access to Capital: A favorable credit rating helps MFIs attract
investment from banks, institutional investors, and
development finance institutions. Investors often rely on these
ratings to gauge the risk and determine lending terms.
2. Interest Rates and Terms: The credit rating influences the terms
under which MFIs can borrow funds. Higher-rated MFIs typically
receive better terms, such as lower interest rates, compared to
those with lower ratings.
3. Reputation and Trust: A good credit rating enhances the
reputation of the MFI in the eyes of stakeholders, including
clients, regulators, and donors.
4. Improved Governance and Practices: The credit rating process
often highlights areas of improvement for the MFI, such as risk
management practices, internal controls, or capital adequacy,
prompting better governance and operational efficiency.
 Credit Rating Agencies for MFIs
Several global and regional agencies provide credit ratings for
MFIs, including:
 Micro Rate: One of the first rating agencies focused specifically
on microfinance.
 Planet Rating: Offers social and financial performance ratings
for MFIs.
 CRISIL: An Indian rating agency that evaluates financial
institutions, including MFIs.
 Fitch Ratings, S&P Global, and Moody’s: These agencies also
provide credit ratings for larger MFIs with a broader scope of
operations.
Process of Credit Rating for MFIs
1. Data Collection: The rating agency collects financial statements,
loan portfolio data, governance structures, and strategic plans.
2. On-Site Evaluation: The agency typically conducts field visits to
assess management practices, loan portfolio quality, and
operational procedures.
3. Analysis: Based on the data and field visits, the agency
evaluates the MFI’s financial health, operational efficiency, and
risk management.
4. Rating Assignment: A credit rating is assigned based on the
evaluation, often expressed in letter grades (e.g., AAA, AA, BB,
etc.).
A strong credit rating helps MFIs grow sustainably by improving
access to financing while ensuring they remain committed to
their social mission.

Emerging practices in microfinance in India

 Microfinance in India has undergone significant transformation
over the years, driven by changing market dynamics,
technological advancements, and evolving regulatory
frameworks. Emerging practices in the Indian microfinance
sector are reshaping the way financial services are delivered to
underserved and low-income populations. Below are the key
emerging practices of microfinance in India:
1. Digitization and Technology Adoption
The integration of digital technologies has revolutionized the
microfinance sector, making financial services more accessible,
efficient, and secure.
 Digital Loan Disbursement and Repayments: Many
microfinance institutions (MFIs) are shifting from traditional
cash-based transactions to digital modes of loan disbursement
and repayment. Digital wallets, mobile banking, and UPI
(Unified Payments Interface) have made it easier for clients to
receive and repay loans without visiting branches.
 Mobile-Based Platforms: MFIs are leveraging mobile platforms
to provide financial services. Clients can apply for loans, track
their loan status, and make repayments through mobile apps or
SMS-based systems.
 Digital KYC (Know Your Customer): Technology has made the
KYC process faster and more efficient through e-KYC systems,
which use Aadhaar and biometric data to verify client identity,
reducing paperwork and speeding up account opening.
 AI and Machine Learning for Credit Scoring: Some MFIs are
using AI and machine learning algorithms to assess
creditworthiness by analyzing alternative data, such as mobile
usage patterns, utility bill payments, and social media activity,
especially for clients without formal credit histories.
 2. Diversification of Products and Services
Traditional microfinance focused primarily on providing small
loans to low-income individuals. However, modern microfinance
is diversifying into a wider range of financial products and
services to better meet the needs of its clients.
 Micro-Insurance: MFIs are offering insurance products tailored
to low-income populations, including health, life, crop, and
livestock insurance. These micro-insurance products help clients
manage risks such as illness, death, and natural disasters.
 Micro-Savings: In addition to microcredit, MFIs are promoting
savings products to encourage financial discipline and build a
safety net for clients. These savings accounts are often linked
with digital payment systems, making deposits and withdrawals
more accessible.
 Pension Products: Some MFIs are offering micro-pension
schemes, helping low-income workers save for retirement.
These are especially important for workers in the informal
sector, who typically lack access to formal pension systems.
 Livelihood and Skill Development Programs: MFIs are
increasingly providing non-financial services, such as training
programs to enhance clients’ skills in business management,
financial literacy, and entrepreneurship. This helps clients use
loans more effectively and improve their income-generating
activities.
3. Focus on Financial Inclusion for Women
Women remain a primary focus for microfinance in India, given
their higher repayment rates and the social empowerment
associated with providing them financial access.
 Self-Help Groups (SHGs): MFIs continue to promote the SHG
model, where small groups of women collectively save and
 borrow from pooled funds. SHGs are often linked to formal
financial institutions for larger loans. The model has been
instrumental in empowering rural women and fostering
financial inclusion.
 Women-Centric Products: Many MFIs are designing financial
products that cater specifically to the needs of women, such as
loans for women-led microenterprises, education loans for girls,
and maternity-related insurance.
 Gender Sensitivity in Operations: MFIs are increasingly training
their staff to be more sensitive to the unique challenges faced
by women borrowers, ensuring a supportive and respectful
approach in client interactions.
4. Client-Centric Approaches and Customer Protection
The sector is moving towards more customer-centric models,
focusing on protecting clients from over-indebtedness and
ensuring ethical treatment.
 Responsible Lending Practices: Many MFIs are adopting
frameworks like the Smart Campaign's Client Protection
Principles, which emphasize responsible lending, transparent
pricing, and mechanisms to avoid over-indebtedness. MFIs now
assess a borrower’s existing debt levels and repayment capacity
more rigorously before issuing loans.
 Grievance Redressal Mechanisms: MFIs are putting in place
stronger customer grievance redressal systems. Clients can now
lodge complaints via hotlines or digital platforms, and MFIs are
required to respond quickly to resolve issues.
 Financial Literacy Initiatives: Several MFIs are conducting
financial literacy programs to educate clients on managing
loans, savings, and other financial products. This helps ensure
 that clients make informed financial decisions and understand
the risks associated with borrowing.
5. Expansion into Rural and Remote Areas
With a large portion of India’s population living in rural areas,
MFIs are increasingly focusing on reaching underserved and
remote regions.
 Agent Banking and Business Correspondents (BCs): To
overcome the challenge of operating in remote areas, MFIs are
partnering with local agents or business correspondents who
act as intermediaries, providing basic financial services to
clients who cannot easily access bank branches.
 Use of Biometric and Aadhaar-Based Systems: Aadhaar-linked
payment systems have made it easier for MFIs to verify and
authenticate clients in rural areas, ensuring efficient service
delivery without the need for physical branches.
 Mobile Connectivity for Rural Areas: The increasing
penetration of mobile phones and internet connectivity in rural
India has allowed MFIs to offer digital financial services even in
remote locations.
6. Integration with Mainstream Financial Institutions
There is a growing trend of collaboration between MFIs and
formal financial institutions, such as banks and non-banking
financial companies (NBFCs), to broaden the reach of financial
services.
 Partnership with Banks: Banks often use MFIs as intermediaries
to reach clients in rural and underserved areas. The
partnerships allow MFIs to expand their product offerings, while
banks can fulfill financial inclusion mandates and reach new
customers.
 Bank-Led Microfinance Models: Banks are increasingly
adopting the joint liability group (JLG) lending model, which was
traditionally used by MFIs. Under this model, small groups of
borrowers are collectively responsible for loan repayment,
reducing the risk of default.
7. Regulatory Evolution and Compliance
The regulatory landscape for microfinance in India has been
evolving to provide greater oversight while fostering growth and
innovation in the sector.
 RBI’s Revised Regulatory Framework for MFIs: The Reserve
Bank of India (RBI) has been updating regulations for MFIs,
including capping interest rates, improving customer protection
mechanisms, and setting standards for risk management. This
helps ensure that MFIs operate responsibly while continuing to
serve the low-income population.
 Prudential Norms for NBFC-MFIs: Non-Banking Financial
Company-Microfinance Institutions (NBFC-MFIs) are subject to
prudential norms such as capital adequacy, asset quality, and
exposure limits. These norms are aimed at ensuring the
financial stability of the sector.
 Priority Sector Lending (PSL): Banks are required to lend a
certain percentage of their portfolios to priority sectors,
including microfinance. This policy encourages banks to
collaborate with MFIs and expand access to financial services
for underserved populations.
8. Impact Investing and Social Impact Focus
With the growing global emphasis on sustainability and social
impact, many MFIs are aligning their operations with broader
social goals, such as poverty alleviation, women’s
empowerment, and environmental sustainability.
 Impact Investing: There is an increasing flow of capital from
impact investors, who prioritize social and environmental
outcomes alongside financial returns. MFIs are receiving
funding from socially conscious investors who want to make a
positive difference in underserved communities.
 Social Performance Monitoring: MFIs are adopting social
performance management frameworks to measure their impact
on clients' lives, focusing on improvements in income levels,
health, education, and overall well-being.
9. Green Microfinance
A relatively new trend, green microfinance, focuses on financing
environmentally sustainable projects and practices.
 Loans for Green Initiatives: MFIs are offering loans for
renewable energy projects, such as solar lighting systems and
clean cooking stoves, especially in rural areas where access to
clean energy is limited.
 Climate-Resilient Financial Products: Some MFIs are offering
loans to help clients adapt to climate change, such as loans for
climate-resilient agriculture, water conservation systems, and
other sustainable practices.
These emerging practices in microfinance are not only
improving financial inclusion but also contributing to the social
and economic development of underserved populations across
India. The integration of technology, regulatory reforms, and a
client-centric approach is helping MFIs scale their impact while
maintaining financial sustainability.
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