INSIDE THE BRANCH:PRODUCTIVITY, PRO SOCIALITY, AND THE DELIVERY OF MICROFINANCE LENDING TO THE POOR

Principal Investigators: Casey Ichniowski (Columbia) and Bruce Kogut (Columbia)
Research Team: Amulya Champatiray, Nikhil Dugal, Surabhi Agrawal
LEAD Centre: Centre for Microfinance (CMF)
Focus Area: Policy & Regulation
Project Geography: Maharashtra, Tamil Nadu. Kerala, West Bengal, Uttar Pradesh, Madhya Pradesh, Uttarakhand
Partner: 20 MFIs Across India
Status: Ongoing

Background:

Professor Casey Ichniowski and Bruce Kogut from Columbia University are leading a study to learn more about the MFI Management Practices in the branch. Through surveys, field work observations and interviews with employees of 20 Indian MFIs, the project aims to study and join two questions that are largely under-researched: what are the sources and best practices for high productivity for microfinance lending institutions and what are the performance outcomes from the social services (if any), e.g. educational and health, that these institutions provide in addition to financial services. These questions are critical to improving the efficiency of institutions financing the poor and to proposing a re-orientation in our thinking about socio-economic impact in this domain. The research is a collaborative effort between IFMR Centre for Micro Finance in India and Columbia University School of Management.
Microfinance is a banking service that provides loans to very low-income clients; it mostly utilizes peer incentives to lower monitoring and collection costs. Microfinance institutions (MFIs) may be for-profit or non-profit in their governance structure, and even within a structure, there is variance not only in management practices but also in the financial and social motivations of investors and employees. MFIs may also seek to achieve broader social objectives through the impact of their lending activities and sometimes through social programs.