Unitus, Inc. has provided $227,000 to fund four innovative microfinance pilot projects at leading India MFIs
As part of Unitus Inc.’s commitment to fulfill existing Microfinance Acceleration commitments, we are pleased to announce USD$227,000 funding of four innovation projects at leading India microfinance institutions (MFIs). We believe that these initiatives will help improve microfinance operations by creating robust and transparent delivery systems to serve the poor better, while helping the industry to further both their financially and socially motivated long term goals.
Project #1: Technology-Based Risk Management Framework
Partners in Prosperity (PIP) along with Mimo Finance will build an IT-enabled risk management framework, which should help create a credible risk management culture in small to medium-sized MFIs. This initiative will help MFIs to lower credit risks by re-engineering key operational processes such as cash handling and portfolio management, supported by superior risk analytics and risk management tools. PIP will collaborate with Mimo Finance to test and execute this project, and findings will be disseminated to the industry through case studies, webinars, blogs and targeted workshops.
Project #2: Rural Education Centers
T Muniswamappa Trust (TMT) and Grameen Koota will start “Jnana Nidhi Centers for Learning” across rural Karnataka. These centers will offer affordable primary education, video based academic coaching, and kindergarten education to low income rural communities. Grameen Koota will partner with Hippocampus Learning Centres, a leading innovator in low-cost educational materials, for equipment, training and technical assistance. Through a pilot of 20 such centers, we hope to improve learning outcomes of school-going children from low income families.
Project #3: Financial Literacy on Debt Management
In order to address issues of excessive borrowing, sub-lending and the imminent role of credit bureaus in India, Ujjivan will develop a documentary film in 8 local languages to educate microfinance clients on optimal debt-management practices. This video will be screened to its customers at mass events across the country, with an aim to create standardized training toolkits which can then be used by other microfinance institutions for lasting change in customer behaviors. We hope that equipping customers with relevant debt management training will help them manage debt prudently, based on their individual financial capacities.
Project #4: Streamlining Individual Lending
As Indian MFIs increasingly move towards individual lending, a scalable, replicable and efficient model of capacity-based loans will become necessary. Swadhaar will analyze client business and household data gathered through its individual lending program, to consequently streamline their credit evaluation methodology. By enhancing risk mitigation measures, building efficiencies in credit processes and training their staff, Swadhaar aims to improve the scalability of individual lending products. We hope that this will demonstrate that MFIs can serve this segment of micro-entrepreneurs with individual loans in a financially sustainable and efficient manner.
We look forward to sharing the results and learnings of these pilot projects later this year.
More about India Microfinance Innovations >