You will find material developed by the Microfinance Group
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material is in five sections.
(click to download)
N & R Srinivasan]
: 9 pages Exhibits: 7
style bank in Karnataka, India sets itself a challenging growth target.
case should enhance understanding of issues involved in scaling: including
governance and organization, management, systems and processes, funding,
Urban Partnership Programme
22 pages; Exhibits: 20
set of four cases built around an Urban MFI that uses the Self-help Group
provides an overview of DUP and is essential reading for the four cases
Pricing for Partners
this case, the MFI considers whether to differentiate its loan pricing
across its partner NGOs
The case should focus on understanding the differences
between the value-add of self-help group promoting institutions (SHPIs)
and the pros and cons of differential pricing. When used in
conjunction with Case 2.2 Vanita Kalyana Samstha, the case could support
learning issues of performance measurement, monitoring and
incentive-structures in a partnership.
MFI grapples with managing the performance and accountability of its
largest but problematic partner agency
The case focus could be on the issues of assessing
partners, role of incentive-structures, enforcement of contracts, nature
of performance measurement, monitoring and management control
Notices from DUP
is contemplating taking defaulting SHGs to court; SHGs are informal
institutions in a legal limbo.
While the case discussion can revolve around the
strategy to take SHGs to court, the analysis should also focus on group
lending in urban contexts, the quality of the SHG promotion activities,
and the assessment criteria of MFIs.
local bank threatens to erode the MFI's market share.
Case analysis could highlight issues of
costs for an MFI with a particular business model, and managing a
relationship with SHGs, bankers and its partner NGOs. Used in conjunction
with Case 2.1: Differential Pricing for Partners, the case could enhance
understanding of the interplay between incentive structures and
operational costs for the MFI.
and financial information about the case.
narratives from North India: Self-help Group [SHG] members
[Text: 6 pages]
are two of the several personal narratives recorded as part of field
research on empowerment in the Mewat region of Haryana. These narratives
may be useful in a session on "impact" - so that an audience can
appreciate the reality often lost in numbers.
the entire dissertation in Section 5
Bharat: Starting an Enterprise of Poor Women
NGO tries to increase income generation opportunities to poor women in
rural Bihar in collaboration with a prominent corporate house. Women, who
were previously untrained in agarbatti rolling, have to learn to
produce the battis to scale to strict quality standards and also learn to
run their own organisation.
The case analysis could study
challenges of setting up of microenterprises in remote areas that can
sustain with the limited skill levels of local women.
||More cases and
caselets will be available here soon...
||“Roundtable: Microfinance in India” IIMB Management Review,
[R Srinivasan and MS Sriram]
don’t lie-this is an introduction
services for the low-income families: an appraisal
of financial services for the poor in India in 2003
in India : a discussion
usual suspects: Vijayalaxmi Das, Al Fernandez, David Gibbons, Malcolm
Harper, Deep Joshi, Udaia Kumar, Vijay Mahajan,
Ramesh Ramanathan, Jayshree Vyas
say it ourselves-but this is an excellent analysis of microfinance in
“Rural finance in contemporary times: interface with
microfinance,” Vikalpa, 30, 2, 81-112, 2005.
[Srinivasan, R and MS Sriram (coordinators) with both usual and
some unusual suspects: NS Sisodia, MBN Rao, Vijay Mahajan, V Leeladhar, MP
Vasimalai, Rama Reddy &
provides insights (by senior policy makers, bankers and microfinance
practitioners) into commercial banking and microfinance in rural India.
hope to have more coming in here...
We have placed abstracts of research by the
Microfinance Group members for your reference.
Raju, K.V., Reddy, Prathap K., Srinivasan, R.
and Sriram, M.S. (2003), "Member-funds and Cooperative Performance,"
Journal of Rural Development, 22,1,1-20.
research examines the role of member-funds in multi-purpose cooperatives
in the state of Andhra Pradesh, India.
The central thesis is that member-funds, both in terms of quantity
and quality, can enhance the control members exert on the cooperative.
The involvement of members through their capital stake could be at
various levels – by the provision of permanent capital, long-term
capital and short-term capital. We expect that each of these will have
differing effects on control and on the culture and systems of the
cooperative. Such an effect on control is expected to directly drive
cooperative performance, and indirectly enhance cooperative performance
through greater usage of the cooperative by the members.
Enhanced cooperative performance in turn would satisfy members, and
the loop will hopefully be completed; satisfied members would place more
funds with the cooperative.
research used data collected from 923 individuals and 30 multi-purpose
cooperatives, as well as case-studies of four successful multi-purpose
'bottom-line' of this research is that member-funds have a central role in
enhancing cooperative performance. Funds
provided voluntarily, either as an outcome of collective cooperative level
decision making or of individual level decisions are of high quality.
Externally compelled member-funds are of low quality, as are short-term
Srinivasan, R. (2003), "Self-Help Groups as Financial
Institutions: Policy Implications Using a Financial Model," Journal of Microfinance,
This paper uses a
spreadsheet financial model to identify key financial policy parameters
that influence the performance of self-help groups (SHGs) whose primary
activity is microfinance. The focus is on
(ten-year) performance. There is bad news for those policy makers and
practitioners who focus unduly on growth as measured by loan activity. A
conservative financial policy that does not inject external
into the SHG in the initial years and, when it does, does so with
moderation, seems appropriate in the long run. Additionally, a high loan
interest rate policy produces SHGs that are strong financial institutions.
Srinivasan R. and
Phansalkar (2003) "Residual Claims in Cooperatives: Design
Issues," The Annals of Public and Cooperative Economics,
paper examines issues in the design of a co-operative member's
contractual relationship with the other agents (including the remaining
members) using organizational economics.
The paper assumes that the central defining characteristic of a
co‑op is the residual claim specification.
theory identifies certain inherent problems of the co-op form, the horizon
problem, common property problem, and non-transferability.
Non-transferability both reduces the incentive to monitor and imposes
limits portfolio diversification. This paper argues that features such as
claim incompleteness and non-transferability are not inherent to the
co-op but may be transaction-cost economizing.
paper also argues that the pre-emptive payoff feature by which the
residual claimants (the co-op members) also become fixed payoff
agents can affect the risk of other agents, and is an important
determinant of co-op risk.
co-op may have more than one potential residual claim base.
Five generic design choices are available for handling possible
multiple claim bases: battleground, pre-specified allocation,
limited return, alignment, and fixed payoff.
paper uses the design of residual claims in sugar co-ops to show how a
co-op can partly overcome some of the problems identified by agency
theory. This illustration
ties together the issues of claim incompleteness and non-transferability,
pre-emptive payoff, and multiple claim bases.
R (2007). Measuring Delinquency and Default in Microfinance Institutions
IIMB Working Paper No. 254
paper addresses the issue of measurement of loan delinquency and default
in MFIs at top management levels. Simulation is used to see how effective
are standard default and delinquency measures.
The paper concludes that the 'mature' current collection rate is a good
measure for estimating default. If loan provisioning is based on this
estimate, net PAR numbers will not mislead.
Here are some materials about the nitty-gritty of microfinance. They include
a short introduction to concept accompanied by practice problems.
* The Delinquency Primer refers to:
Rosenberg, R. (1999). Measuring Microcredit Delinquency: Ratios can be
Harmful to your Health. CGAP Occasional Paper, 3, 20.
** The Economics of Group Lending has been adapted from:
de Aghion & Jonathan Morduch (2005) The Economics of Microfinance.
The MIT Press, Cambridge, Massachusetts.