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Client Drop-Out Rate

This short technical note begins by stating that the client drop-out rate is a major factor affecting the sustainability and growth of MFIs. The rate is a reflection of the relationship between the MFI and its clients. Monitoring the trend in the drop-out rate could yield valuable insights on an MFIs performance and credibility, as drop-outs could be a cause as well as an effect of factors internal and external to the organisation.

The purpose of this note is to suggest a working definition of the phenomenon of client drop-out rate which has field relevance and is operationally convenient for MFIs rather than based on detailed research and needing elaborate methodologies to establish and measure. The note proposes a formula to calculate the drop-out rate from the simple records that MFIs generally maintain.

For the purpose of reaching a definition and to derive a working formula, various definitions and calculation methods are discussed in the note. As such, the note comments on various methods for calculating client drop-out and arrives at the formula adopted by M-CRIL.

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