Social Performance Indicators Blog

Geographic Outreach: A Review of SP Report Data

Posted by: Taea Calcut

MFIs seek to provide financial products and services to those excluded from formal financial systems. A variety of factors can contribute to individuals' exclusion, one of which is their geographic location. In this post, we examine the geographic outreach of 201 MFIs worldwide that submitted MIX Social Performance reports in 2008, exploring their targeted and real market locations, services offered where no other financial services exist, and the effects of country-level factors like population density and urbanization levels on MFIs' operations. (Note: in all examples discussed below, we recognize that sample sizes remain too small to draw definitive conclusions. However, we present information with the goal of encouraging greater numbers of Social Performance Report submissions as well as framing potential research questions for the future.)

Graph 1: MFIs’ Geographic Outreach by Region (n=201)

  

First, are there trends in MFIs' geographic outreach by region? Graph 1 above illustrates the breakdown of MFIs serving majority populations in rural or urban/semi-urban environments. We find that, in our sample, MFIs reporting from the East Asia & Pacific (EAP), South Asia (SA), and Sub-Saharan Africa (SSA) regions are more likely to have the majority of their client populations residing in rural areas. Alternately, MFIs reporting from the Eastern Europe & Central Asia (ECA), Latin America & Caribbean (LAC), and Middle East & North Africa (MENA) were more likely to have the majority of their client populations residing in urban/semi-urban areas.

Rural Outreach through Credit Unions: ASC Union, Albania

Posted by: Katherine Oglietti

Interview with: Gentain Cane

Marketing, ASC Union, Albania

ASC Union is a voluntary union of individual Savings and Credit Associations (SCAs), which are village financial institutions that are created and managed by their members and administrated by its member-elected Board of Directors. Each member makes a minimum deposit into the SCA, which constitutes the majority of the financing for loans and represents over a quarter of loan portfolio funding at the Union level. ASC Union supports its SCAs financially and technically, with the aim of promoting productive activities in rural areas. It is the first microfinance provider in Albania, out of a total of 7 microfinance providers registered by MIX in the country. In the following interview, Gentain Cane of ASC Union describes how the union reaches rural clients at competitive interest rates while covering its costs. 

MIX: In the MIX Social Performance Report, ASC Union states that its social mission is "to provide financial services to the clients living mainly in rural areas and practically excluded from the conventional financial institutions." How does ASC Union use its market studies and client satisfaction surveys to design loan and savings products to meet the needs of its low-income clients in rural areas specifically?

Gentian Cane: The services offered and provided by ASC Union are primarily at the micro level. In contrast to commercial banks, microloans are offered to our clients at an interest rate approved by the ASC Board of Directors at the beginning of each year, (currently 11-16% depending on loan type) which is kept at a fixed rate throughout the year. ASC offers the most competitive interest in the rural areas where we work in order to both meet the social component of our mission as well as to mitigate the needs of low-income clients. 

Going the Distance: MFIs' Geographic Outreach

Posted by: Taea Calcut

 

The provision of financial services to different geographic areas can support income and employment generation among underserved rural and urban clients. In the coming days, the Social Performance Indicators Blog will examine MFIs' geographic outreach through data from over 200 MIX Social Performance reports and interviews with select MFIs. We will explore issues including the percentage of clients served in different geographic locations, particularly those below the national average of development, as well as the services offered by MFIs to clients living where no financial services are provided. Remember -- readers' thoughts on this topic are, as always, welcome in the comments below!