Stuart, G., Ferguson, M. & Cohen, M., 2011, Microfinance & Gender: Some Findings from the Financial Diaries in Malawi, Final project/program report, Microfinance Opportunities, Washington.

2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation: 1. Take into account substantial insights that can affect microfinance provision success:

• Provision of a broad range of micro finance products including package with diversified interest rates and loan periods
• Women’s specific finance needs and habits at different life cycle moments and in accordance with their physical mobility opportunities (some are able to be more mobile than others)
• Identification of innovative ways of reaching borrowers, especially in remote, rural areas and/or where they have low educations levels.  E.g. example from Malawi where a biometric smart card is used that enables non-literate customers can open and manage a savings account using only their fingerprints for identification.

Reference: Stuart, G., Ferguson, M. & Cohen, M., 2011, Microfinance & Gender: Some Findings from the Financial Diaries in Malawi, Final project/program report, Microfinance Opportunities, Washington.

Evidence sample: Policymakers often prescribe that microfinance institutions increase interest rates to eliminate their reliance on subsidies. This strategy makes sense if the poor are rate insensitive: then micro-lenders increase profitability (or achieve sustainability) without reducing the poor's access to credit. The study tested the assumption of price inelastic demand using randomized trials conducted by a consumer lender in South Africa. The demand curves are downward sloping, and steeper for price increases relative to the lender's standard rates. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rates, which is consistent with binding liquidity constraints.

Innovative ways of reaching clients are often needed, when clients are rural, remote and often have low education levels. Opportunity International’s bank in Malawi (OIBM) has used creative ways to reach its clients. They offer a biometric smart card that enables illiterate customers to open and manage a savings account using only their fingerprints for identification. Then, they have developed a mobile banking van which visits villages on certain days of the week for men and women to use