Beyond Basic Credit and Savings:
Developing New Financial Service Products for the Poor


Increasing numbers of MicroFinance Institutions (MFIs) are seeking to diversify the financial services they offer to their clients. There is a growing understanding and acceptance of the diverse nature of the credit needs of the poor, and an awareness that not all of these are addressed by pushing "productive loans". Thus there is a pressing need to examine the best ways of designing and introducing new financial service products into MFIs.

This paper is written on the basis of the experience of BURO, Tangail a Bangladeshi MFI committed to providing flexible and responsive financial services to its clients and operating in what is perhaps the most competitive market in the world of MicroFinance. Having long been a market leader in open access voluntary savings accounts, BURO, Tangail is currently testing a wide variety of savings and loan products. The methods used to develop these broadly followed four key phases of financial service product development:

  1. Introduction
  2. Research to identify needs and opportunities
  3. Design and pilot testing
  4. Monitoring and evaluation of the pilot test
  5. Revision and scaled-up implementation
These are examined with additional material and insights from a recent series of studies of successful innovative and poor-responsive banks financed by GTZ as part of the work of the CGAP's "Financial Instruments (Savings Mobilization) Working Group", and Marguerite Robinson's work on Bank Raykat Indonesia.

The paper offers a generalised methodology for those committed to developing new financial service products for their clients, and to going beyond basic credit and savings.

Graham A.N. Wright,
MicroFinance Consultant,
MicroFinance International Associates,
18/Ka Pisciculture Housing Society,
Ring Road, Shymoli,
Dhaka 1207, Bangladesh
Tel. 880-2-815815
Fax. 880-2-9125492

April 1998

Hari Srinivas -
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