Microfinance institutions (MFIs) need to rebuild credibility and confidence to achieve sustainable growth, a joint study by consultancy firm PwC and Sa-Dan, a self-regulatory organisation (SRO) of the sector, said.
Microfinance, which is principally underpinned by trust among the stakeholders, who are the borrowers, field officers and lending institutions, has become more transactional, the study said.
Major setbacks like demonetisation and the Covid pandemic have further exacerbated the decline in group culture in microfinance, which has had a widespread impact on repayment discipline and public confidence, the study pointed out.
“Rebuilding credibility and confidence remains a major challenge to achieving sustainable growth”, the study said, adding that empowering and equipping customers with adequate information is crucial in regaining their trust.
According to the study, MFIs have also experienced declining support from external stakeholders, including investors and refinancers​Microfinance institutions (MFIs) need to rebuild credibility and confidence to achieve sustainable growth, a joint study by consultancy firm PwC and Sa-Dan, a self-regulatory organisation (SRO) of the sector, said.
Microfinance, which is principally underpinned by trust among the stakeholders, who are the borrowers, field officers and lending institutions, has become more transactional, the study said.
Major setbacks like demonetisation and the Covid pandemic have further exacerbated the decline in group culture in microfinance, which has had a widespread impact on repayment discipline and public confidence, the study pointed out.
“Rebuilding credibility and confidence remains a major challenge to achieving sustainable growth”, the study said, adding that empowering and equipping customers with adequate information is crucial in regaining their trust.
According to the study, MFIs have also experienced declining support from external stakeholders, including investors and refinancers ​Latest News [ SOBAN NEWS: International and National ]
