Microfinance Centre

1
Researching Microfinance in CEE and the NIS
region NEEDS and ACTIONS
Microfinance Centre for Central Eastern Europe
and the New Independent States
2
Needs for researching microfinance in CEE and the
NIS region

• Microfinance industry mapping and standards
• State of the industry coverage and performance
• Setting performance standards and benchmarks
• Microfinance role in socio-economic development
• Understanding the regional context that is
  different than other traditionally poor
  settings
• Identifying development opportunities for
  microfinance in the region
• Assessing impact of microfinance at various
  levels
• Identifying new ways of reaching the poor
• Practitioner-oriented research
  adapting/developing systems and products

3
Needs for practitioneroriented research in CEE
and the NIS region

• Need for adaptation of imported MFI models to
  regional context
• Not reaching the target group
• Growing competition
• High client desertion

SHIFT from product centred to MARKET ORIENTED
4
MFC Research Unit objectives and principles
Research
Development

• Stimulate innovation in the regional microfinance
  industry by changing attitudes and developing new
  models, tools and methods
• Develop regional best practices
• Improve knowledge about the microfinance sector
  in the region and its role in socio-economic
  development
• Bring global microfinance know-how to the region

Using various dissemination channels to make sure
that development follows the research
Action Research combined with conventional
research
Responding timely to the needs of microfinance
industry stakeholders
Setting clear objectives in order to get relevant
findings
5
Responding to the research needsIndustry
mapping and standards

• 2002 regional mapping study
• empirically based, comprehensive picture of the
  current state of the microfinance industry in the
  region
• performance comparison of main regional MF models
  
• main barriers to growth confronting the
  development of microfinance in the region and
• recommendations aiming at expanding the outreach
  of microfinance institutions (MFIs) to poor
  clients, improving financial performance,
  increasing the MFIs access to finance, and
  improving the legal and regulatory framework
  supporting microfinance in the region.
• performance standards monitoring

6
Regional Mapping and Access to Financing Study
Objectives

• To deepen the understanding of the microfinance
  industry in the CEE/NIS region
• To explore whether acess to financing is a
  constraint to microfinance development
• To facilitate exchange of market information and
  help develop partnership among donors, investors
  and MFIs

Phase I Sept 2001 April 2002 Questionnaire
survey of MFIs and funders
Phase II April July 2002 In-depth analysis
and research on povery outreach and commercial
financing
7
MFC - MICROBANKING BULLETIN
Data Collection and Analysis
Inicjatywa Mikro, Poland OI Russia
Asian Credit Fund, Kazakhstan KCLF, Kazakhstan
2001
MAFF, Albania BESA, Albania PRIZMA, BH NOA,
Croatia Agency for Finance in Kosovo Microcredit
Montenegro Moznosti, Macedonia
Constanta Foundation, Georgia
2002
KEP Kosovo MDF Kamuraj, Armenia MCO Bossel, BH
8
Responding to the research needsMicrofinance in
socio-economic development

• Assessing impact on enterprise development and
  household well being
• Assessing impact of microfinance on
  reconstruction
• Assessing wider impacts of microfinance
• community building and social capital formation

9
Responding to the research needsPractitioner-ori
ented research

• Institutionalising systems to learn from
  clients
• Working group on expansion strategies
• Working group on governance
• Developing trainings in client assessment and MR
  tools

• PLAN - moving forward two main research agendas
• Market Oriented MF
• Poverty Focused MF

10
Action Research technique as a learning tool for
the practitioner and the whole industry

• Action Research
• aims at improvement and involvement
• is typically designed by and for practitioners
• involves a cyclic process in which research,
  action and evaluation are interlinked
• involves a change intervention
• promotes reflection and self-assessment

• empowers those who participate
• contributes also to wider understanding that can
  be used by others

(after Zuber-Skerrit, 1995, p.13)
11
Imp-Act Project in CEE and the NIS

• Participatory planning process with 7 partner
  MFIs managed by MFC and Paul Mosley (2000 Mar
  2001) 4 themes identified

• DEMOS
• PARTNER
• BOS-VITA
• PRIZMA
• FORA
• Inicjatywa Mikro
• Integra Foundation

• Providing partner MFIs with a background of IA
  MFC Client Assessment Training in Cracow Sep
  2001

• Developing individual working plans and drafting
  research frameworks Oct 2001 Feb 2002

• Research and implementation till Oct 2003

• Findings dissemination Nov 2003 Apr 2004

•  SYSTEMS  Improving management and
  institutional development by use of a holistic
  impact assessment system based on MFIs needs

•  RECONSTRUCTION  Assessing impact of
  microfinance on reconstruction

•  WIDER  Assessing wider impacts of
  microfinance (i.e. community building, social
  capital formation, etc.)

12
SEEP PLP Project Institutionalized Client
Tracking System Informing Market Research and
Building Customer Loyalty (with MDF Kamurj)

• OBJECTIVES
• Institutionalize learning from clients by
  developing the Client Tracking System (CTS)
• Develop a new product following the complete
  process
• evaluation and preparation, market research,
  design, pilot test, launch
• Increase customer outreach, satisfaction and
  loyalty through client assessment
• Enhance regional industry knowledge about the
  client assessment