Hishigsuren: Scaling up and Mission Drift1 Scaling up and Mission Drift: Can Microfinance Institutions Maintain a Poverty Alleviation Mission While Scaling.
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Hishigsuren: Scaling up and Mission Drift1 Scaling up and Mission Drift: Can Microfinance Institutions Maintain a Poverty Alleviation Mission While Scaling up? Gaamaa Hishigsuren Doctoral candidate/Consultant firstname.lastname@example.org
2 Taxonomy of scaling up Rationale and forms of scaling up in microfinance Challenges and Mission drift Application to MFIs Issues for future research Key issues
Hishigsuren: Scaling up and Mission Drift3 Scaling up coverage/structure Scaling up activities Scaling up strategies Scaling up organizational sustainability Taxonomy of scaling up
Hishigsuren: Scaling up and Mission Drift4 Forms of scaling up in microfinance ‘Growth’ or ‘expansion’: PRODEM in Bolivia, Grameen and ASA in Bangladesh, BRI in Indonesia Diversifying the range of products and services: saving, insurance, pension, and leasing Enhancing organizational sustainability: transforming into a regulated entity to mobilize public deposit as a source of lending (e.g., BancoSol, Mibanco, CARD Bank, K-Rep) and setting up a separate unit which provides training and consultancy for a fee (e.g. BRAC, Grameen Bank, and K-Rep) Scaling up strategies: BRAC in Bangladesh
Hishigsuren: Scaling up and Mission Drift5 Large unmet demand Economies of scale to reach financial sustainability Visibility and recognition Scaling up of microfinance
Hishigsuren: Scaling up and Mission Drift6 Portfolio quality and cost Organizational structures Human resource challenges Management information systems and accounting challenges Legal issues Mission drift Challenges of scaling up
Hishigsuren: Scaling up and Mission Drift7 Move towards serving: Less risky vs. poorer clients Urban areas versus rural areas Less risky sectors vs. seasonal, high risk sectors (e.g. agriculture) Cut down operational costs, incl. field staff salary and non-income generating activities Increase costs to clients, e.g. increasing interest rate, fees, and transaction costs. Change organizational culture, i.e. becoming more professional vs. based on personal relations. Mission drift
9 There is some evidence of mission drift when MFIs scale up No systematic study on the implications of scaling up on the ability of MFIs to maintain the social mission No reliable indicators of mission drift. Need a framework and a set of indicators and tools that may be used by researchers as well as practitioners to measure the fulfillment of social mission while scaling up. Future studies: more reliable indicators of mission drift, mechanisms that lead to mission drift and mechanisms that help retain mission while scaling up. Conclusion
Hishigsuren: Scaling up and Mission Drift10 Application to MFIs, policy makers and researchers There are various forms and strategies of scaling up Challenges are inevitable Conscious effort and strategy is necessary to ensure continuous adherence to the original social mission while scaling up. Developing and incorporating a system to measure adherence to social mission, e.g. Hatch – social impact evaluation system If the mission is at risk, assess the strategy and consider slowing down.
Hishigsuren: Scaling up and Mission Drift11 Research in progress… Mission drift: Depth of outreach Quality of outreach Scope of outreach Cost of outreach Impact of outreach