Hi Sushanta, The major problem facing MF is pricing their products even if it is for administration purposes, the interest burden is still heavy for the acive poor to comprehend and service their loans.
That is a nice area for research. How about their logic factored in this shift is a result of something that may be was not properly addresses by the Microfinance originators in Burma, bangaladeshi, Thailand etc. The philosophy behing microfinace is stimulate business and inculcale business into the minds of the active poor to get out of below poverty lines. The products that suits the communities that be is paramount. The type of loans is a product of marketing and testing to generate proper interests in some of the loans like those for tailors ,shoe menders, thrift savers, round circle funding, group loans, cooperatives, food loans, burial loans as circle loans, and many others. Mcirofiance business i call it is to cater for the groups and communities that dont or are not able to access commercial loans due to lack of security or mortgages or whatever so the risks are high. But it will need to look at many of the loan products that are administered to non profit organisations meaning that there must be some one who shields the charges, interests on the borrowed funds from banks of grants from government or from donors whatever. to me the performance and beneficiates to the communities is paramount. I'm saying this because I used to be a chief internal auditor for two year of a government microfinace state company and i know how we used to develop loan products, to whom must these loans benefit, how would we reduce loand applications time lag to getting theloan and loan administering , loan products and loan interests, loan recoveries etc. So most of these loans were actually supposed to be loan free and not to generate interests but should benefit communities. There were problems of weak management and weak supervisions, little knowledge of corporate governance, lack of many issues to go by in administering successful microfinance project. This all is done in the Ugandan context.