On one of my recent visits to a microfinance institution (MFI) for an assignment, this incident set me thinking.
This NGO was very worried about competition from other financial service providers in the area due to which they were in fear of losing their market very rapidly. The competitors were providing much better quality services at a much lower price, and providing much better customer service than the current NGO.
Now, it was very recently (about 1.5-2 years) that the NGO had started its microfinance operations, otherwise it used to work on other development issues like health, education, advocacy, gender issues etc. They started out with a concern that poor people do not have access to good quality financial services and they started their microfinance operations to address the same. Ofcourse they were not starting microfinance operations to earn money or because it was the latest fashion and everyone else was doing it!!! They were doing it out of their concern for the poor.
After these couple of years, the development activities have taken a backseat and microfinance is their major activity. With the entry of new players in the market and banks lending directly to a section of their clients, they are fast losing their market share. This organisation also realised that all these organisations had deep pockets and can afford to provide better services to the clients than themselves, and they would not be able to match the same even with their best efforts in quite some time to come. This has them worried. They just wished that these players were not there in the market. And this has me perplexed.
If, as the organisation claimed, it was only concerned with the clients getting access to quality financial services, why would they wish that the other players were not there in the market? When these players are providing services better than themselves? When they know they cannot match the other players services for a very long time. Why do they want their clients to still get these services at a lower quality, higher price as long as they take it from them?
Is it not better that the organisation go back and do the development stuff that they did earlier? Now that the reason why they had started microfinance operations were fulfilled? But the organisation did not seem the least interested in going back to the development activities, neither were the staff.
Paisa kamana hai isliye microfinance kar rahe ho, to aisa bolo na yaar.......why this garb of charity???
God save the poor from these "development" organisations.
This NGO was very worried about competition from other financial service providers in the area due to which they were in fear of losing their market very rapidly. The competitors were providing much better quality services at a much lower price, and providing much better customer service than the current NGO.
Now, it was very recently (about 1.5-2 years) that the NGO had started its microfinance operations, otherwise it used to work on other development issues like health, education, advocacy, gender issues etc. They started out with a concern that poor people do not have access to good quality financial services and they started their microfinance operations to address the same. Ofcourse they were not starting microfinance operations to earn money or because it was the latest fashion and everyone else was doing it!!! They were doing it out of their concern for the poor.
After these couple of years, the development activities have taken a backseat and microfinance is their major activity. With the entry of new players in the market and banks lending directly to a section of their clients, they are fast losing their market share. This organisation also realised that all these organisations had deep pockets and can afford to provide better services to the clients than themselves, and they would not be able to match the same even with their best efforts in quite some time to come. This has them worried. They just wished that these players were not there in the market. And this has me perplexed.
If, as the organisation claimed, it was only concerned with the clients getting access to quality financial services, why would they wish that the other players were not there in the market? When these players are providing services better than themselves? When they know they cannot match the other players services for a very long time. Why do they want their clients to still get these services at a lower quality, higher price as long as they take it from them?
Is it not better that the organisation go back and do the development stuff that they did earlier? Now that the reason why they had started microfinance operations were fulfilled? But the organisation did not seem the least interested in going back to the development activities, neither were the staff.
Paisa kamana hai isliye microfinance kar rahe ho, to aisa bolo na yaar.......why this garb of charity???
God save the poor from these "development" organisations.
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