How do large banks and financial institutions benefit from participating in microfinance?

Asked Mar 9, 2015· 1 answer
Faisal KhanAnswered Mar 9, 2015
Couple of ways:

  • The distribution network of a well-thought of microfinance bank is something that is very hard to beat
  • The ROI on micro-loans given out is great
  • The default rate is very low (compared to traditional commercial loans)
  • The profiling you get on a per sector basis is something not available otherwise
  • Ability to move people from microfinance to traditional banking (possibility of up sell)
  • Transaction behavior influences physical expansion plans
  • Grassroots level understanding of how the economy is doing
Financial InclusionDevelopment EconomicsEmerging Market Economies
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