Financial sector development
Since the 1990s, financial sector development (especially microfinance) has enjoyed a rise in public interest. But it has become clear that financial services do not lift people “automatically” out of poverty. Sometimes the poor can even be adversely affected, for example through over-indebtedness or the loss of unprotected savings.
For empowering pro-poor development, financial sector development must be truly customer-oriented:
- Financial products and services should address specific client needs in their respective contexts. They must enable poor clients to boost their income and create opportunities - without creating new sources of risk.
- At the level of microfinance institutions, the challenge of offering appropriate services while ensuring the sustainability of the institution must be addressed strategically. Different types of institutions, such as microfinance NGOs, grassroots financial cooperatives, and full-fledged banks often have different target groups and should address customer-orientation accordingly.
- At the meso level, strong federations, credit bureaus, microfinance associations, and consumer protection organizations can enhance professionalism of microfinance organizations, promote sound business practices and strengthen consumer protection.
- At an aggregate level, governments must develop the appropriate framework for healthy market development. Adequate regulation and supervision are required to ensure transparent products, prevent over-indebtedness, and guarantee both secured savings and decent micro-insurance services.
joyn-coop supports its client base with conceptual and project-related advice to…
…improve access to finance and financial inclusion: We offer advice on financial inclusion strategies and the development of public policy. We focus on the long-term sustainability of microfinance by promoting a financial system approach and compliance with national regulation and internationally-recommended transparency standards.
…strengthen and develop meso-level institutions: We assist in promoting active meso-level institutions, enhancing a healthy development of local microfinance markets.
…deepen customer orientation at the level of microfinance institutions: We measure and evaluate client satisfaction and outcomes of microfinance in a timely and practical manner, such as through Social Performance Management and Assessment. We provide advice on how MFIs can develop and offer reliable, cost-efficient and tailor-made financial services, and reach out to underserved markets.
…conceive innovative products and approaches: We support product development that caters to the different financial management needs of very poor, poor, or near-poor people as well as enterprises of different sizes. We develop new financial services and products for enhancing the adaptation capacity to risks linked to extreme weather.