ACCION and its MFIs network exploring new business models.

Since 1973, ACCION has consistently pushed the boundaries of microfinance to reach more of the working poor with efficient, tailored financial products and services. Today, ACCION and its network of partner microfinance institutions (MFIs) are examining the current microfinance business model – and challenging the industry to identify where we can move beyond this traditional approach to reach the massive scale that is necessary to effect social change.

In designing this ‘New Business Model for Microfinance,’ ACCION and its Network partners are exploring how to overcome obstacles that limit outreach, and therefore social impact, examining the prevalence of cash transactions, the labor-intensive “high-touch” loan officer-client relationship, and the difficulty in reaching microentrepreneurs in rural areas with limited infrastructure. Key elements of the new model that ACCION thinks will surpass these and other challenges include a widely diversified product portfolio, integrated delivery channels (such as mobile phone banking and savings cards), solutions and tools for controlling risk, and a new look at core banking systems.

On October 3rd, ACCION staff and Network members will host a day-long workshop on the New Business Model for Microfinance in San Salvador, El Salvador, to coincide with the Inter-American Development Bank’s 10th Microenterprise Forum.

(source: ACCION newsletter)