Demand for standards in poverty impact

The microfinance organization has demonstrated what can be achieved; it has to demonstrate still now what cannot be achieved. It is now time to innovate and design services that maintain high standards of financial performance, but which set new standards in poverty impact. There is need to –
  • Improve the impact of microfinance.
  • Innovate to make poverty-focused microfinance more cost-effective;
  • Understand the costs like, smaller loan size, increased demands on staff, smaller portfolios, more remote areas etc. and benefits like lower exit rates and arrears, higher penetration rates etc. of working with the very poor.
  • Base organizational self-sufficiency on client self-sufficiency and success. Where their vulnerability can be overcome, very poor clients can achieve significant growth and changes.

Performance Measuring

MFIs can established clear best practice for measuring and reporting financial performance and comparable standards for performance in poverty outreach and impact and transparent reporting of such data. MFIs inshore standard reporting guidelines using performance measures that take into account both efficiency and effectiveness.
MFIs should monitor and report on the poverty level of new clients, as well as who they are not reaching. This data should be relative to the local context, and be comparable to national poverty lines. For ensure effective management towards improved impact on the poorest, basic impact information can be use for program design like-
  • Poverty outrage data.
  • Limit of client loan and/or savings performance by poverty level.
  • Basic and regular information about alternative indicators for impact, which could form the basis of MFIs-wide indicators.
  • Institutional performance in terms of design and delivery of poverty-focused microfinance, and form a basis for assessing whether MFIs are likely, given their approach, to impact positively on poverty by Poverty auditing.

Demand Of Micro-finance

Micro Finance is development approach. Generally Micro Finance targeted to-
  • The benefit of the poor, Hardcore poor & Low income clients
  • Self-employed
  • Financial services
  • Social development services
  • Development of self confidence
  • Health services
  • Training
  • Management capabilities
  • Literacy
  • Basic education
  • Job creation
  • Entrepreneur development
  • Mainstreaming etc.
Ultimate demand of Micro Finance is package services towards the economic and social development of the people. For this Micro Finance face so many challenges.