Microfinance Business Plans

Many microfinance institutions have business plans. But these plans are sometimes of poor technical quality. They are often overambitious, because the underlying projections are insufficiently detailed to reveal the hurdles that the institution must overcome in order to expand.

And if they are prepared by outsiders, as they often are in response to requirements by potential funders, they usually remain on the shelf once funding is received rather than serving as an ongoing management tool.

 

Microfinance-oriented banks/regular banks engaged in microfinance operations – banks that offer a broad range of financial services, such as deposits, loans, payment services and money transfers, to the poor and low income households for their microenterprises and small businesses.

Microfinance institutions – institutions engaged in the delivery of micro financial services such as credit, deposit-taking, insurance, money remittances and transfers.

 

Microinsurance – a risk management tool providing protection and social security to low income households and workers in the informal sector against specific perils in exchange for small regular insurance premium payments proportionate to the likelihood and cost of risks involved.