Microfinance for bankers

This training guide provides the session notes for a one day workshop for the managers of commercial banks which are considering a move into the microfinance market. The workshop is designed to introduce the core characteristics of microfinance and then encourage participants to identify the different ways that banks can become involved and when it is better for them not to become involved. The key target audience is the decision-makers in commercial banks but all banking staff may find it interesting to compare the conventional banking approach with the provision of micro financial services to those who normally have no access to financial services.

Anyone who wishes to use this material must first read it through carefully and decide what parts s/he wishes to use and what changes or adaptations are needed. Whenever possible, examples should be replaced by more locally relevant material. If a workshop based on this material will be conducted in another language, all handouts should be translated before the workshop starts. This material is untested at the present time and the Rural Finance Learning Centre would welcome feedback from anyone who makes use of the session guides.


Session 01: What is micro-finance?

This lesson is designed to enable participants to identify, describe and explain the critical features of micro-finance and how it differs from conventional banking practice. It is done through role play and discussion.

Session 02: Should a commercial bank enter the micro-finance market?

This lesson is designed to enable participants to identify the advantages and disadvantages of the micro-finance market for a commercial bank, and to decide whether or not a given bank should enter the market and how. Participants are invited to role play as proponents of the arguments for and against banks entering the microfinance market and the session introduces the concepts of direct and indirect involvement.

Session 03: How banks can engage directly in micro-finance

This lesson is designed to enable participants to describe and identify the main features of the principal direct micro-finance delivery methodologies, and to appraise them in the context of their own or typical banks’ situations. Small case studies of real banks are provided as a basis for discussion.

Session 04: How banks can use indirect methods to engage in micro-finance

This lesson is designed to enable participants to identify different methods whereby a commercial bank can become indirectly involved in micro-finance, and to determine which method is most appropriate for their own or other banks. Discussion is based on real life examples of banks that have successfully entered the micro-finance market using a variety of indirect methods.