Practical Microfinance

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This book has been written to help people provide effective training to those who work or plan to work in the field of micro finance. It is a training guide with detailed step by step descriptions for 22 sessions. These sessions can be used on their own, in part or integrated with other material, or as the basis of a complete course on micro finance. The session topics are:

  1. New paradigm micro-finance’ – what is it?
  2. Introduction to financial accounts and analysis.
  3. Field visits to micro-enterprises.
  4. Rates of return and the cost of money.
  5. Visits to micro-finance groups.
  6. Financial analysis of a micro-finance institution.
  7. Planning for MFI profitability.
  8. Marketing micro-finance.
  9. Gender – men and women as clients for micro-finance.
  10. Arrears and defaults – definition and measurement.
  11. Graduation and individual loans.
  12. Individual versus group lending, the pros and cons of each.
  13. Bangladesh Grameen groups or Indian self-help groups?
  14. Subsidies – when and how?
  15. Commercial banks and micro-finance.
  16. The need for micro-savings services.
  17. Micro-insurance.
  18. MFI staffing – recruitment and motivation.
  19. Management information systems, selection and design.
  20. Measuring the impact of micro-finance.
  21. The downside of micro-finance.
  22. Regulation and supervision, by whom and how?

Each session guide contains:

  • a brief statement of the session objective
  • an estimate of the time it should take
  • detailed notes for the trainer, including questions to be asked, issues to be discussed and points to be emphasised.
  • A number of simple exercises, case studies and other materials for stimulating participants'learning.

The session exercise and case study handouts may be photocopied for participants or customized to meet trainees needs via freely available web files. An introductory chapter includes advice on how to use the material in the book.

Like most remarkable innovations, micro finance is quite simple. Bankers and those who understand finance need only to appreciate the requirements of this new market to be able to serve it competently and NGO staff and other community development people who understand financial realities can quite quickly become successful micro finance practitioners. The use of this manual will enable more people to provide effective short courses in micro finance and thus contribute to the increased provision of financial services that meet the needs of the poor.

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