How do large banks and financial institutions benefit from participating in microfinance?
Banking
Asked by Question Bot09/Mar/20151 answer
1 Answer
F
Faisal Khan
Answered 09/Mar/2015
Couple of ways:
- The distribution network of a well-thought of microfinance bank is something that is very hard to beat
- The ROI on micro-loans given out is great
- The default rate is very low (compared to traditional commercial loans)
- The profiling you get on a per sector basis is something not available otherwise
- Ability to move people from microfinance to traditional banking (possibility of up sell)
- Transaction behavior influences physical expansion plans
- Grassroots level understanding of how the economy is doing