Microfinance institutions and providers could have a bigger impact on development by expanding their services as well as adopting new technologies and integrated approaches in their business, a number of microfinance experts said at a recent forum on social and solidarity economy in Canada.
Forum participants included general managers and owners of microfinance institutions who discussed how they have integrated “value-added” services and transformed their business models to include investments, not just loans. These measures, according to the participants, are just some of the ways to increase the impact of the microfinance sector on development.
Jose Ramiro Becerra Sterling, one of the forum’s participants, described Utrahuilca, the Colombia-based credit and savings cooperation he manages, as a comprehensive project that offers a “value-added” dimension. Aside from insurance and loans at low interest rates, the cooperative provides housing credits, health services and union-organizing services, among others, IPS News notes.
“If there is no added value, there is nothing we have to give incentive to the workers who come to us,” Becerra Sterling has explained. “We have to give them a dignified treatment.”
The Pro-Rural cooperative in Bolivia also goes beyond traditional lending operations.
“We do not just manage the funds and give out loans,” IPS quotes Flavio Ralde Laguna, the cooperative’s executive director. “We actually invest with the producers.”
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