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Market strategy development and 3RD generation microfinance in India

Document type: article
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Abstract: Microfinance in India has passed and reached three different stages. The first took place in the 1990s, with the SHG-bank linkage model, and the second with MFIs who acted as intermediates between social and financial systems. Finally, most of the MIFs have adopted the Joint Liability Groups (JLGs) methodology to achieve rapid growth. Yet, many of those who follow this new trend are losing sight of the original aim and are shifting their focus to profit rather than clients’ needs. This shift will bring a tectonic effect, creating a third generation of microfinance institutions (3G-MIFs). The main difference from the previous generations lays in their longterm market strategy. 3G-MFIs will operate through a full and long-lasting spectrum of financial needs, and they will try to focus more on the advantages for their clients. Moreover, they will add new services, such as those related to food supply, education and health assistance. Since clients have the right to choose the best institution for their own needs, MFIs will need to adapt themselves to client-needs rather than business-needs, thereby producing a tectonic shift in the market.
Authors: Jayant Natu, A.
Country: India
Category: General
End Page: 34
Serial number: 2
ISSN: [2210-2175]
Volume: I
Journal: Spanda Journal : quarterly of the Spanda Foundation
Keywords: credit , finance , markets
Language: eng
Organization: Spanda Foundation
Year: 2010
Region: South Asia
Right: © 2010 Spanda Foundation
Subject: Economic Development and Trade
Start Page: 32
Title: Market strategy development and 3RD generation microfinance in India