Product
Today's financial institutions have provided financial
services such as savings, mortgages, consumer credit, insurance, loans to
finance business expansion and transfer uang.Dengan the impact of globalization
of financial institutions continue to innovate coupled with the rapid
development of technology to fulfill their client or consumer demand.
This condition has been going on in the industry, where the
transfer of money across continents instead of an advanced problem again and
all forms of insurance has been offered as to whether the condition ni
pasar.Namun will also take place in developing countries? And whether
low-income people will also enjoy the facilities of existing industry in the
country?. Here microfinance institutions began to take its own role in
addressing the situation has moved tersebut.LKM help the middle class in terms
of finance such as credit, savings and loans and other facilities which are
being applied to the country's industry.Untuk together let us discuss products
offered by microfinance institutions.
A. Loan
The success of many MFIs can be identified in their ability
to successfully combine the practice of informal sector (money lenders) into
formal institutions.
These include
flexibility, rapid access to funds, clear and easy conditions. Remarkable
success of microcredit originating from its ability to replicate some features
of the loan sharks to finance more formal.Lembaga lower interest rates applied.
These interest rates are still much higher than traditional banks because of
higher administrative costs of managing small loans rather than loans less with
a larger amount.
But the important thing is to provide access to credit for
people who would otherwise be excluded from the formal financial system with
lower interest juah adopted by competitors, but the micro finance institutions
should perform a valuable service application for their clients.
- Instant access, which is a fast credit approval and rapid
thawing is very important for the client and often the main reason why many
people are dealing with a lender even at very high interest rates.
- Clearly, easy and flexible, ie It is important to provide
credit on favorable conditions for the client. Transaction costs, which include
transportation costs (to pay the installments or the money) or time to go to
work, the entire life of the loan must be kept low. Credit also should not be
strictly linked to specific goals. MFIs should monitor the flow of revenue from
their clients but with a certain degree of tolerance as limiting the possible
use of the funds will not allow micro-business to have the necessary
flexibility in the use of money received and thus interfere with the
development of micro.
- Fixed the service, service credit must be given on an
ongoing basis, not only for a limited period of time. Lack of these
requirements is a major drawback of many of the projects although their
effectiveness has not the purpose of providing financial services in a
sustainable and continuous.
- Alternative replacement warranty and grace, that poor
people often lack traditional collateral. To overcome this obstacle many MFIs
to use other types of collateral, known as alternative collateral and
collateral substitutes. Assurance Group is a first example, while personal
property such as equipment or jewelry are examples of alternatives that are not
accepted as collateral by collateral in the traditional banking sector.
2. Savings
MFIs typically offer two types of savings: voluntary and
force.voluntary
replicate savings savings services provided by traditional
commercial banks as savings are forced to serve as collateral for the loan.
This account does not
always provide a return on deposits and deposited with the institution until
the loan balance was paid. Loans to establish micro-businesses that are useful
only for people who have entrepreneurial skills and economic opportunities
while more and more people to save rather than to keep risky assets or hiding
cash at home.
Microfinance institutions must provide a complete set of
short, medium and long term deposit account, in addition to the more liquid
accounts.
This is to meet the diverse needs of liquidity and rate of
return of the client.
Savings will also attract more clients than the loan itself
and is an important source of funding for the institute. It also should be
cheaper than traditional commercial loans to MFIs are mostly not a huge
additional cost. This is due to the infrastructure already available is needed
to accumulate savings.
Procredit Network is an example of a network of sustainable
and profitable financial institution that provides a wide range of financial
products. In addition to credit and savings, Procredit Bank around the world
also provides insurance and money transfer services.
If the deposit services are successfully implemented, the
provision of such services will also help MFIs to achieve sustainability
finance introduce saving facilities will better serve the needs of the
client, reducing capital costs and allows
MFIs to raise resources for expansion. The main challenge
for MFIs dalammembangun this service is the transformation of their corporate
culture and government jugaketerlibatan as important in the regulation and
institution control take the savings from the public. Umumnyadilarang NGOs
mobilize savings and all other MFIs that do not hold a special license. It is
need for each type of financial institutions to protect depositors in
case institution default and this is especially important for poor people who can
not afford to lose their money. To overcome this problem and address the needs
of many special license MFIs offering savings services not directly but in
partnership with the licensed deposit-taking institutions, usually banks.
3. Microinsurance
Low-income entrepreneurs, just like everyone else, are
vulnerable to risks, such deseas, injury, theft, death, accidents and
floods.
This is why financial products to reduce the impact of such
risks is a valuable financial service mereka.Asuransi some MFIs began to
increase their portfolios in response to this need of protection.
Providing savings and
credit insurance services in addition to making financial services a complete
MFI microfinance institutions provide.
Ie the full set of financial services to provide direct
income people rendah.Untuk LKM requires a special license and insurance
requirements for such a license granted by the government is usually very
tight.
Control of insurance companies for the same reason why they
control the financial health of deposit taking institutions, protection of
client and system stability. As the majority of MFIs do not meet these
conditions, there is an alternative to direct provision of insurance and the
most common is an existing partnership with insurance companies. Insurance
companies may not offer their products directly to poor people because they do
not have experience in the market segments: MFI can fill this gap and worked as
an intermediary between insurance companies and klien.Asuransi product for the
target group of microfinance institutions must be designed according to
specific needs and protect their specific risks: they may include health
insurance, livestock insurance and crop insurance. In the MFI offers some insurance
but as they start to enter the industry is growing among the set of products
offered.
4. Money transfer
Money transfer service is an important financial services:
money transmission business.
that emigrants send money home to relatives, who grew up
with strong and often managed by informal arrangement with the high cost and
high risk.
Depending on local regulations and the cost of these
services can be delivered directly or in partnership with money transfer
companies. MFIs have a competitive advantage relationships with their clients
and the service can also be connected with other products or can be taken into
account when calculating the repayment capacity of each client.
