Financial Services

Financial services are an essential ingredient for SE growth. In recent years, microfinance has emerged as a leading strategy for microenterprise development. Often, the strategy of providing financial services distinctly and separately from any other business development services is promoted in order to help financial organizations focus on the complex task of providing credit to the poor on a sustainable basis.

However, as the BDS field has developed and the impact and sustainability of BDS programs demonstrated, researchers and policy makers have focused on helping SEs access both financial and business development services. And, although policy makers and technical advisors do not recommend it, many practitioners offer SE clients both financial and business services packages.

The financial services that are typically offered in coordination with business development services include two broad categories:

§ Microfinance Services (Description and links below.)

§ Alternative Finance Mechanisms (Description and links below.

Microfinance Services:

§ For more information about microfinance in general, visit CGAP’s microfinance gateway: www.ids.ac.uk/cgap and/or ITDG’s alternative finance website: www.alternative-finance.org.uk

§ For more information about offering business education in conjunction with microfinance in a sustainable manner, visit www.ffhtechnical.org

§ Parallel Programs in Microfinance and BDS: Strategies that help SE clients access both services through independent programs.

Alternative Finance Mechanisms:

Alternative finance mechanisms are strategies that help BDS clients access finance through a range of strategies other than microfinance. Visit the ITDG alternative finance website, above.We are looking for volunteers to develop content on the following or related topics (to contribute, contact mary@mcvay.us):

§ Encourage or provide supplier credit—finance the supply chain

§ Encourage or promote buyer financing

§ Expand or create factoring companies that provide working capital for confirmed orders

§ Provide or facilitate equity financing

§ Provide or facilitate credit guarantees

§ Facilitate and negotiate credit terms with traditional banks

Practitioner Learning Program: Annotated Bibliography of Learning Products

This is a working annotated bibliography of the 40 publications produced by the SEEP Practitioner Learning Program in BDS Market Assessment, Client Assessment, Poverty Assessment, Improving the Efficiency of MFIs, and Strategic Alliances for Financial Services and Market Linkages in Rural Areas.

Rural Finance for Value Chains Quarterly, vol. 1, no. 2

This newsletter is a publication of the Practitioner Learning Program (PLP)in Strategic Alliances for Financial Services and Market Linkages in Rural Areas. The PLP is a SEEP Network initiative for exploring key challenges facing the microenterprise field. The PLP, a competitively run grants program, focuses on generating, communicating, and leveraging the results and lessons from its grants to benefit the industry as a whole.

Social Return on Investment and Its Relevance to Microfinance

The purpose of this Progress Note is to introduce key concepts of social return on investment (SROI) to the SEEP Network and broader microfinance communities. This Progress Note discusses factors contributing to SROI emerging on the microfinance agenda, explores SROI’s value to microfinance institutions, describes some SROI tools with examples, and suggests next steps for microfinance practitioners in developing/promoting SROI within the microfinance industry.