Group Lending is the Simplest

I am back after two months of hiatus or of going somewhere out of blogosphere for a while.

I was prompted to post here because of an e-mail I received from someone who is working in microfinance sector.

She said:

I feel I just can’t stand the pressure of doing fieldworks anymore.

I said:


She said:

I think the system is not going to work after all efforts of implementing it. I feel more comfortable to be at the office and avoid the constant prodding of higher management to work for more outreach. And more outreach all the time.

I said:

Just go back to the basic of microfinance and learn to appreciate it once more.

End of the story.

Well, I can’t be judgmental on her attitude. Microfinance, indeed, entails a lot of efforts. It is a system which has been dreamed of as a way of poverty alleviation and the massive numbers of poor people are overwhelming. But, microfinance basics are so easy to follow.

  1. Microfinance is lending in small amount.
  2. Microfinance entails frequent payment.
  3. Microfinance is a way of lending with credit discipline.
  4. Microfinance is a marketing of HOPE.
  5. Microfinance is a system that engages with a lot of poor people, people with diverse cultures to where the system adapts its approaches.

One thing more, microfinance is now commercialized and has to be viable and sustainable to meet its mission, i.e., poverty alleviation.

I always believed that while outreach should be done with dramatic speed, management capabilities should always be at par with the motion. It is the utmost reason why I blogged on keeping numbers in check and by adapting the system into the way of life of a village.

For those who are following this site and waiting for me to finish the Credit Discipline Series, I will say sorry. But, if you started right where I begun you can already say that you should begin with Group Lending Approach while learning the ropes of doing microfinancing.

There are a lot of approaches that will be adopted along the way as you adapt the implementation of the microfinance as a system to the Political, Economical, Social and Technological Aspects of your area of operations or your segmented target clientele.

The best thing to do is copy what others did and adapt it to where you are operating. Let us say, the Grameen Bank Approach, as an example. Start the center with a group that consists five members. This is called the Self-Help Group. Do it by using or implementing the 3 common factors of group formation.

By having the Group Lending Approach, efforts are lessened because some of the responsibilities of instilling CREDIT DISCIPLINE are transfered to the members of the group. Some field works are transfered to the leaders of groups.

These transfer of responsibilities should be nurtured by showing that they belonged and owned the system. That without Credit Discipline, the HOPE of coming out of the stenches of poor living will never be realized. That the system of microfinancing is not to alleviate some but all of them. And, that, it is not the responsibility of the Account Officer or the Development Officer or the Field Worker, but to themselves.

The work of the management is to nurture this CREDIT DISCIPLINE among and between the members.

When poor people realized that Field Workers of any MFIs are only instruments or bridges between their dire lives and the HOPE (which the microfinance is trumpeting) of good living, working with the poor using the microfinance programs is, indeed, satisfying and fulfilling.

Then, any field worker will always look forward to each morning of helping  more poor people. The numbers will pour in and the quest for more outreach is not anymore work but will be a MISSION.

Go back to the basics of microfinance. Appreciate how it works. Know your area of operations. Know your target clientele. Use simple approach (Group Lending). Market HOPE. Nurture CREDIT DISCIPLINE.

And, be a FULFILLED Field Worker!

photo credit: Gloria Sadje via photopin (license)