Reality Check at Swadhaar – ACCION Ambassadors Blog the World – September 2, 2011

> Posted by Center Staff
How are loan officers actually able to scale up client numbers so quickly? How are repayment rates so high and reliable? How do MFIs actually get through all the client protection and paperwork that they claim they do with poor people in slums? Does it actually function as simply as it’s often advertised?
Nirav Chheda probes the answers to these questions in India, where he’s rounding out the global reach of ACCION International Ambassadors. The Ambassadors blog chronicles the entire team’s worldwide travels; you can subscribe directly in order to get their insights in your inbox.
In earlier posts, we highlighted from-the-ground reports from Ambassadors Pamela Chang, David Firth Bard, Stephen Matthew Lee, Jason Loughnane, Wei Wei Pan,and Leah Vinton.
Chheda’s “Final Field Visit – A Reality Check” from August 24, begins:
 Before actually seeing microfinance field operations from a worm’s-eye view, I sometimes wondered, what’s the catch? How are loan officers actually able to scale up client numbers so quickly? How are repayment rates so high and reliable? How do MFIs actually get through all the client protection and paperwork that they claim they do with poor people in slums? Does it actually function as simply as it’s often advertised?
This summer has satisfied much of my curiosity into the ground-level realities that make possible the seemingly too-good-to-be-true phenomenon of sustainable microcredit. What I found on the field did not disillusion me or surprise me, but rather added a sense of credibility to what was previously only a bird’s-eye view. The ‘catch,’ so to speak, is that with the dedication of Swadhaar’s staff to the social objective also comes an understanding that Swadhaar is a business that needs to make it financially in order to carry on. Swadhaar serves a market that nobody else will for the reason that nobody else will, which makes it all the more necessary to keep a keen business perspective with each decision they make.
On my second to last day at Swadhaar, I made a field visit to the same client zone I went to on my second day over two months before. On my first visit to the zone with loan officer Santosh, we had walked around the slum to visit PAR (portfolio at risk) clients, or those who were late on payments. So my first field visit wasn’t filled with inspiring client stories, but rather a variety of excuses from women for missing payments. It wasn’t disillusionment, but rather a reality check.

Read the rest of this post, and check out the other Ambassadors’ reports, by clicking here.
Image credit: bdesham
Have you read?
Dispatch from the Field: Loan Officer Incentives – A Delicate Balancing Act
Smart Campaign Unveils e-Learning Course to Boost Client Protection and Financial Education
Putting Carrots to Good Use in Microfinance

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